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Canadian farmers might turn to more oilseed: Analyst

By Ai Heping in New York | China Daily USA | Updated: 2018-04-12 04:36
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While US soybean farmers are facing possible Chinese tariffs, farmers in Canada may increase plantings of oilseeds to produce more canola, according to a market analyst.

"If anything, the China thing encourages more canola," Winnipeg, Manitoba-based David Reimann, a market analyst at Cargill Ltd, told Bloomberg. "China's country's purchases of Canadian oilseed shipments could climb by several hundred thousand tons.''

He told Bloomberg that farmers will probably switch from lentils, peas and cereal crops to canola to take advantage of higher prices.

Plantings of oilseed could reach 24 million acres in 2018, the most ever and up 4.4 percent from a year earlier, Tony Tryhuk, branch manager of RBC Dominion Securities office in Winnipeg, told Blomberg.

In 2017, Canadian farmers planted more acres of oilseed than wheat for the first time, while soybean plantings have more than doubled in the last decade, with sowings forecast by the government to reach a record this year.

Canola was invented by Canadian scientists in 1974 by breeding out undesirable traits from the rapeseed plant. Canada is the world's top grower of canola, which can be used as a soybean substitute in cooking oil and animal feed.

China is the No. 1 importer of the oilseed. In 2016, China imported 4.8 million tons of Canadian canola, 3.5 million tons of seed, 600,000 tons of oil, and 660,000 tons of meal, for a total of $2.7 billion, according to the Canola Council of Canada.

Canola was invented by Canadian scientists in 1974 by breeding out undesirable traits from the rapeseed plant.

Chuck Penner of LeftField Commodities said he isn't so sure Canadian canola is an instant winner. "Most of the canola meal coming out of crush plants is already committed to US buyers, so there's not a whole lot of extra capacity floating around, " he told RealAgriculture.com. "To me, the biggest opportunity (if the proposed tariff actually becomes reality) would be stronger Chinese interest in Canadian soybeans."

aiheping@chinadailyusa.com

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