WESTERN PRODUCER — Canada’s canola oil shipments to the United States are booming as the country’s renewable diesel industry accelerates.
Canadian exporters sent a record 2.6 million tonnes south of the border in 2022-23 and that number is expected to rise in future years.
“We envision that trend continuing,” said Chris Vervaet, executive director of the Canadian Oilseed Processors Association.
Canada’s crushers produced 4.15 million tonnes of oil in 2022-23.
He anticipates to seven million tonnes over the next five years if all the announced plants are built and operating at 90 percent capacity.
There needs to be a home for all that additional oil and the obvious markets are the U.S. and Canada because of the and sustainable aviation fuel industries.
The U.S. is already usurping Canadian canola oil from other markets, accounting for 86 percent of Canada’s exports in 2022-23.
Sales to China have plummeted to 144,985 tonnes in 2022-23, down from 1.19 million tonnes a couple of years earlier.
“There’s a lot of advantages having a market closer to home,” said Vervaet.
“It really does become the more desirable market.”
For one thing, it is a market based on biofuel mandates, so it is predictable and inelastic.
There are also logistical advantages in shipping product to nearby North American cities rather than to port position and then by ocean vessel to overseas markets.
“That is a huge advantage,” he said.
“That is a massive efficiency gain.”
The U.S. Department of Agriculture is forecasting that the U.S. will import three million tonnes of canola oil in 2023-24, up from 2.85 million tonnes last year.
Canada is forecast to increase its global exports to 3.2 million tonnes in 2023-24, up from three million tonnes last year.
As a result, the country’s domestic consumption of canola oil is expected to decline slightly, 小蓝视频 replaced by imported soybean oil.
The USDA forecasts Canada will import a record 150,000 tonnes of soybean oil, primarily from Argentina.
Meanwhile, U.S. soybean oil exports are 小蓝视频 suppressed because of strong domestic demand for the product from the renewable diesel sector.
U.S. soybean oil exports peaked at 1.5 million tonnes in 2009-10. They dropped to 171,000 tonnes in 2022-23.
In 2023-24, the U.S. is expected to be a net importer of the commodity for the first time in history, with 159,000 tonnes of exports more than offset by 181,000 tonnes of imports.
The country is also importing more tallow and used cooking oil (UCO).
Clean Fuels Alliance America recently released a report forecasting that global UCO supplies could rise to between five and 10 billion gallons by 2030, up from 3.7 billion gallons in 2022.
That means there could soon be stiff competition for canola oil in the U.S. market.
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