Global Canola Opportunities in the Sustainable-Fuel Future: Is Australia Fit and Ready?

Government initiatives in the northern hemisphere to curb emissions will fundamentally change, and be the key driver of, the global canola market outlook through to 2030. Demand for, and the pricing of, Australian canola will depend on several factors, including: how quickly the EU phases out palm oil as a feedstock for biodiesel in favour of canola before its 2030 deadline, how much Canadian canola exports drop once planned crush capacity additions come online, how much global production grows, and the additional sustainability requirements that may be placed on Australian canola.

Report summary

Under our base-case outlook, we expect:
 
- global canola trade volumes to decrease by more than 15% by 2024/25 and by just under 10% by 2029/30, versus 2020/21 levels, as Canada’s crush capacity expansion reduces export volumes; 
 
- EU canola import demand, assuming average growing conditions in the union, to be moderate up to and including 2025/26 before increasing notably as palm oil is phased out towards their 2030 deadline;
 
- Australian canola area to increase over the coming decade, with production averaging just over 4m metric tons by the end of the decade and exports averaging 2.9m metric tons (up 23% from the five-year average of 2016/17 to 2020/21). 
 
The 2021/22 global supply is severely reduced by the drought in Canada, and continued heavy EU demand is benefiting Australia and other exporters. But already, dramatic resupply is expected in 2022/23 as Canadian production recovers and as the EU imports significantly less following its own acreage expansion – even average seasonal conditions would represent the best global production season in at least four years.