Shifting canola trade flows: Australia, China, and South America's impact on demand

Описание: As the largest buyer of canola seed from Canada, China’s actions to restrict imports of Canadian canola seed, oil, and meal carry undeniable weight in the market, and the long-term market implications may be more complex than they appear at first glance.

Speaking with Shaun Haney on RealAg Radio, Jon Driedger of LeftField Commodity Research unpacks the potential fallout from the trade restrictions, noting that while the price impact is clearly negative, it's difficult to isolate just how much is attributable to the tariffs themselves. “There’s no escaping that... but it’s really hard to quantify exactly what that is,” Driedger says, pointing to multiple market factors, including soybean oil prices and crop size.

With China reopening its doors to Australian canola and increasingly sourcing oilseeds from South America, Canadian exporters could be facing a multi-year reshuffling of trade flows. Driedger explains that while China may reduce its Canadian imports by around two million tonnes, a similar pattern to the 2019–2022 trade disruption, some of that volume could be absorbed elsewhere. “We could see a scenario where there is some shuffling... maybe we send a little bit more to Japan, the EU, or the UAE,” he says.

Meanwhile, Driedger is cautiously optimistic about the role of domestic crush capacity, driven by demand for biofuels. While not a full replacement for Chinese seed demand, increased crush, up by potentially one million tonnes this year, could ease export reliance. And though Canada’s canola is not currently the preferred feedstock under U.S. renewable diesel policy, it still benefits from broader oil demand. “If they end up sucking in a whole bunch more soybean oil, that leaves a supply hole elsewhere that canola can slide in,” he explains.

Even with poor sentiment and weak basis levels, Driedger sees potential strength in the canola market heading into spring 2026, particularly if broader vegetable oil demand holds. “We’re a little more optimistic when we look further out,” he says.


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