Canola yields at eight year low
Exports down83 % yoy
The industry experienced an unfavourable year due to dry seasonal conditions and severe frosts, which resulted in the smallest canola harvest since 2010. Although prices remained relatively high, area planted was constrained by crop rotations and higher expected returns from cereals. Cottonseed was the main high point with above average production and yield.
The total area planted to oilseeds decreased by 15% year-on-year with the area planted to canola declining 17% year-on-year. Although last year’s high prices were anticipated to encourage a greater area planted to oilseeds, this did not eventuate as higher expected returns for cereals influenced farmers’ planting choices1. Despite this, soybean plantings more than doubled and there was a 25% year-on-year increase in the area planted to sunflowers1.
Total oilseed production was down by 20% year-on-year. Canola production dropped by half with yields down 40% year-on-year and down 32% compared to the five-year moving average. This was partially offset by cottonseed production (a byproduct of cotton production), which rose by 22% as a result of higher cotton lint production and yields1.
Domestic canola prices tracked close to the five-year average with prices falling slightly by 3% year-on-year1. Deteriorating seasonal conditions towards the end of the growing season resulted in a slight upswing in the NSW price, relative to most of the other Australian ports.
Total NSW oilseed exports declined by 83% year-on-year54, despite a reasonable export surplus.
Global canola market dynamics altered in 2017–18 due to changes in European Union (EU) demand for non-GM canola31. Traditionally, Australia has had a competitive advantage over other exporters to the EU as it was one of the few countries to grow low-emission canola that could access the EU’s environmentally-friendly energy markets55, 56. In 2017, the EU removed restrictions on the import of processed oil from Argentina. These imports are used for bio-diesel production and are cheaper than premium Australian oil31.
The EU had previously dominated NSW exports in both 2015–16 and 2016–1754. Dry seasonal conditions early in the 2017–18 growing season fuelled production concerns, and resulted in EU port-based crushers sourcing their canola from other Australian states experiencing a much better season37. This, accompanied with the reduction in market share, saw NSW canola exports to the EU decline to virtually nil54.