Australia’s canola crop looks set to boost global vegetable oil supplies this season, as a big jump in planted area and favorable growing conditions point to a new record for Australian canola production.
An increase in Australian production would be good news for international buyers, since Canada, the world’s biggest canola producer, is headed for a smaller harvest due to a decrease in planted acres, as Gro wrote about here. Australia exports the bulk of its canola, mainly to the EU for use in biodiesel production with the remainder going to food producers in Asia and the Middle East.
Gro’s vegetative health index for Australian canola is at one of the highest levels in more than 20 years, largely a result of a cool and wet start to the season that has aided soil moisture and crop growth. Based on the crop’s current performance, canola production could surpass last year’s record of 6.5 million tonnes.
The vegetative health index, known as NDVI, is a satellite-derived measure of plant health and greenness that serves as a real-time signal detecting changes in crop conditions. Gro’s Climate Risk Navigator for Agriculture is able to chart NDVI values worldwide weighted for acres planted to specific crops such as canola, as can be viewed here.
Gro predicts Australia’s statistics agency ABARES will need to increase its current production forecast to reflect the crop’s positive outlook.
Canola is Australia's third-largest crop, after wheat and barley. The country’s canola production has jumped nearly three-fold since 2000 as acres have expanded and yields have improved. In 2022/23, Australian canola farmers are expected to harvest a record 3.4 million hectares, up 12% from last year as high canola prices edged out acres planted to barley and oats.
Australia is the world’s No. 5 producer of rapeseed, which is known as canola in its genetically modified form. The Australian crop is harvested in November and December.
Canola futures surged 59% in 2021 as soaring demand for vegetable oils amid lower supply sparked a global oilseed price rally. Top producer Canada suffered a 35% drop in its crop last year as unrelenting hot and dry weather engulfed the Prairie region. So far in 2022, November canola futures are up 16% despite a recent global market sell-off sparked by price declines for palm oil.