Article by: Hari Yellina
Natural catastrophes and trade restrictions are combining to create a perfect storm for Australian vegetable oil farmers as global prices soar. A vacuum in the market has been addressed by Australia’s record crop, which was caused by the war in Ukraine and drought in Canada. According to the Canada Price Index, canola is currently valued $1,184.70 CAD per tonne on the global market, up from roughly $680 a year ago. In Australia, prices have surpassed $1,000 per tonne for the first time in six months. The Australia Oilseeds Federation has termed the prices as “astronomical.”
Mr Goddard stated, “The crisis in Ukraine has offered yet another high platform for canola pricing.” Another issue, he claimed, was the huge demand for biofuels in Europe and the United States. Last Friday, the Indonesian government imposed a ban on palm oil exports. Analysts believe that as the world’s leading supply, demand for other oilseeds will climb as a result. “Vegetable oil costs are growing on Indonesian grocery shelves therefore the government has banned palm oil exports to attempt to keep that from happening,” he said. “With this kind of cost, growers will more than likely reevaluate how much space they designate to canola, and we could witness a fairly substantial area planted to canola again,” he said.
Palm oil is the most widely utilised around the world, according to Andrew Whitelaw of Thomas Elder Markets. “It means that canola futures in Canada and France have jumped up, just like soybean oil,” Mr Whitelaw explained. “Some of that price buoyancy from overseas should start to filter through to Australian pricing,” he added. He claimed the rates were still good even if the cost per tonne dropped $200 this year. Seasonal conditions are expected to be favourable on Australia’s east coast in the next months, with La Nina expected to persist.
Farmers in central and western New South Wales are nearing the end of their canola planting season. “A lot of people would love to put in more canola,” Chris Groves, who manages a mixed-cropping operation between Cowra and Canowindra, said with present pricing, “a lot of people would love to put in more canola.” Mr Groves explained that the little burst of rain after a few dry months had created an ideal planting season. “It just gives folks who are planting a lot of confidence to go ahead and plant, maybe add a little more fertiliser, and hope for a nice year.” “The price of fertiliser has nearly doubled. Fuel is quite expensive, and the price of canola seed has also increased significantly “he stated.