Cooking-oil binge has world’s biggest canola reserves plunging

Stockpiles of canola in the world’s biggest producer plunged as a drought in Canada combines with global surge in demand for cooking oil made from the seed.

Inventories of the oilseed tumbled by 49% to 1.8 million metric tons on July 31, the lowest level since 2017, Statistics Canada data showed Wednesday. More restaurants are opening up even as the Covid-19 pandemic drags on, using up vegetable oil. China is also purchasing more of the seed, with exports rising about a third from the prior year.

Prices for oilseeds like soybeans and canola have been touching new highs in 2021, and falling reserves signal that they could remain expensive. Groceries around the world have been getting pricier, and dwindling stockpiles offer little hope of relief from food inflation.

The soaring demand for vegetable oil is also evident in the figures for canola crushing, which the process of extracting oil from the seed. The Canadian crush rose to a record 10.4 million tons. 

Canola futures rose slightly Wednesday, hovering below record-high levels reached in July due to drought in parts of the Canadian Prairies that are fanning supply concerns.