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Driving the surge, Anderson said, is China, which appears to be stockpiling canola and other agricultural commodities during the COVID-19 pandemic. That has driven up prices worldwide, and led to increased demand from places such as the EU and the United Arab Emirates.
Canada is also seeing increased demand from China itself, in spite of an ongoing diplomatic dispute between the two countries. According to Reuters, China more than doubled purchases of Canadian canola products to 1.2 million tonnes as of December, despite continuing to block canola shipments from two Canadian exporters, Richardson International and Viterra, since 2019.
“China blocked imports from two companies . . . and that’s still the case, for canola seed,” said Ward Toma, general manager of Alberta Canola. “But China never stopped buying canola oil and canola meal from Canada. China is still there, and global demand is there. There are still people looking to buy our product.”
It’s unclear exactly how long the current canola boom will last. Anderson said while he believes the market will remain fairly strong going into the late winter, it is likely time limited.
“In the past, they’ve gone through these phases of buying very aggressively and then they’ve suddenly stopped,” he said.
And, of course, because farmers sell throughout the year, not everyone who planted canola last spring is getting a windfall. Serfas said most farmers had probably already sold 50 to 75 per cent of their canola crop before these high prices hit, adding he “dumped piles of canola” at the $11 a bushel mark earlier in the season.