NSW Department of Primary Industries

Oilseeds

  • arrow-up GVP $1.5 billion est. Down 18% year-on-year.
  • Average domestic canola prices softened over the course of the year.
  • NSW oilseed exports reached a new record volume with demand from new and emerging markets being the main drivers of export volume growth.
NSW oilseed production, dominated by canola, continued to decline from the strong crops of the previous two seasons, although still well up on the 10-year average. Whilst domestic canola prices generally traded within a band ($640 - $770/tonne) over the course of the year, averaging $703/tonne (Non-GM, Port Kembla less freight), 63 prices continued to trend down on the record values achieved in 2021-22 and early 2022-23, driven by historically high production, strong global supply, and weather-related production pressures from overseas.

Production

NSW Oilseed production

  • Canola
  • Cottonseed
  • Soybeans
  • Sunflower
  • 10 year average
Download data (.XLSX)
Source: ABARES (2024)
The forecast drier seasonal conditions and lower price expectations prior to planting resulted in a 7% reduction in the area planted to canola, 6 albeit still nearly 20% above the 10-year average plantings. This suggests a greater adoption of canola into farming systems as well as tighter rotations over the past few years. 25

Highly variable seasonal conditions across the key production areas of the state resulted in an uneven autumn break. Good early season rainfall in the southern growing areas, combined with excellent stored soil moisture, accelerated the development of early sown canola crops, however in central and northern NSW, highly patchy rainfall restricted plantings. Higher average temperatures and high winds during early spring, also further reduced available moisture, particularly impacting the growth rate of later-sown crops.

The hot and dry spring conditions resulted in may crops, particularly those in the north of the state, receiving very little effective rainfall. Many crops matured early, leading to many commencing windrowing and harvest at least 2 weeks early. 25 Despite the challenging climatic conditions, the forecast volume of production was not significantly impacted, with yields remaining well above the decade average, and oil and test weights well within the average range. 58 In total, 1.6 million tonnes of canola was produced, down 11% year-on-year however, still the 5th highest on record. 6

Cottonseed production was estimated to have increased by 4% to 872 thousand tonnes, NSW's third largest cottonseed crop. 6 Cotton plantings remained historically high and average yields remained steady year-on-year. The total area planted to soybeans increased and production was up 29% year-on-year to 45 thousand tonnes.

Total production of oilseeds reached 2,544kt, down 6% year-on-year. 6

Price

Local prices firmed early in the year on support from the drying domestic weather conditions, before coming off the boil in September following a weakening global trend, driven by an upward revision to forecast Canadian production and record rapeseed oil exports from the Ukraine. 81 112 The combination of post-harvest selling and declines in international benchmark prices saw domestic canola prices fall steadily to their seasonal low of $640/tonne in March 2024. 63 Some small gains were achieved during late Autumn 2024, increasing by $55 per tonne over May and June (delivered Port Kembla), 63 off the back of wet weather production concerns related to the European rapeseed crop.

There are two major future markets for canola; The Canadian ICE futures (which tends to drive the GM Canola market) and French MATIF (which drives non-GM Canola). As NSW is a non-GM source, the MATIF is a market useful indicator. Continued strong global canola production and increasing soybean supplies saw the MATIF contract ease through the first quarter of the year, with the basis averaging about -16 AUD/tonne. Contract values then largely trended sideways over the remainder of the year as the market adjusted to an increase in Ukraine canola exports and smaller crush margins. 128

The local canola price spread between the East and West coast broadened throughout the year due to lower WA production and trade disruptions caused by the Red Sea conflict. Attacks on vessels crossing the Red Sea in early 2024 increased the risk of shipping through the Suez Canal, resulting in logistical bottlenecks and the re-routing of traditional trade routes to the Middle East and Europe, increasing shipping times and costs. This route is typically utilized by vessels transporting Australian canola to the EU. Whilst he majority of NSW canola is traditionally sold to domestic facilities for crushing into oil and meal, during times of high production (as it has been in recent years) the surplus is exported, with key historical markets being the EU for biofuel production. Due to the closer proximity of WA ports to these key markets, a clear western price-advantage developed.

Global Indicator and domestic canola prices

  • MATIF - Rapeseed (AUD)
  • Canadian ICE (AUD)
  • Port Kembla (Port less freight)
Download data (.XLSX)
Source: Investing.com (2024)
Cottonseed prices surged in early November, driven by strong domestic feed demand, with limited availability due to a large Chinese export program. 42 Demand was also supported by the dryer than normal 2023 autumn which resulted in many graziers, particularly those in the north of the state, increasing the use of protein supplements to help maintain cattle intake as pasture quality declined.

Trade

NSW oilseed exports continued to break records, reaching another new high of 1.3 million tonnes, up 31% year-on-year. Export value was $927 million up 7%. 79 This increase was driven by a 33% increase in the volume of canola exports and 22% increase in the volume of cottonseed exports, off the back of consecutive successful cropping seasons and a high exportable surplus. Whilst exports to our traditional oilseed markets in the EU remained relatively stable, exports to less-traditional ‘new’ markets increased exponentially, reducing the EU’s share of oilseed exports to 42%. 79

This export diversification was driven by a number of factors including low Canadian production (a key competitor for Australian canola), new biosafety policy in Pakistan (facilitating imports of GM canola), and an increase in food processing infrastructure in the UAE (which has facilitated a rise in canola crushing facilities). 3

DPIRD Initiatives in Focus

Farm Business Resilience Program

The Farm Business Resilience Program aims to build the strategic management capacity of farmers, farm managers and employees to prepare for and manage risks, adapt to climate change and improve the economic, environmental and social resilience of their businesses.

FBRP

The Farm Business Resilience Program was launched by the NSW Department of Primary Industries and Regional Development with support from the Australian Government's Future Drought Fund in 2021.

The program is developed specifically for farm businesses and their employees, rather than as a general business skills program. It aims to build the strategic management capacity of farmers, farm managers and employees to prepare for and manage risk, adapt to a changing climate and improve the economic, environmental and social resilience of their farm businesses.

The program takes a multi-faceted approach, offering farm Business Coaching, workshops and events and a creation of useful resources and tools plus digital learning resources with podcasts and webinars, for farmers across NSW.

Click here for further information on the Farm Business Resilience Program

www.dpi.nsw.gov.au