Canada’s canola exports drop as cooking oil kings bet on fuel

Exports from the world’s top canola shipper could drop by nearly half in coming years as Canada’s biggest processors bet more of the oilseed will be used in renewable fuel to power trucks and farm equipment.

Canada’s shippers plan to boost the nation’s canola crush capacity by 50% as companies seek to meet the rising demand for the oilseed in North America’s burgeoning renewable fuel market. It’s a seismic shift that is poised to slash exports by as much as 4 million tons in the next two to three years as more crush capacity comes online, said Chuck Penner, the owner of LeftField Commodity Research in Winnipeg, Manitoba. 

About half of Canada’s 20 million tons of canola production currently is processed domestically and the other half is slated for export. 

“I think it’s a generational shift,” said Chris Vervaet, executive director of the Canadian Oilseed Processors Association. “I don’t think it’s hyperbole for me to say that people working in the industry for decades have never seen this type of enthusiasm and buildout of capacity.”

Canola was invented by Canadian scientists in 1974 and is used in everything from cooking and deep-frying to salad dressings. Companies from Cargill Inc. to Viterra Inc. are working to expand their crush capacity just as new national regulations will require gasoline and diesel producers to reduce the carbon intensity of their fuels.