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Ukraine Canola Boost To effect Cdn Exports To Pakistan

WINNIPEG, MB, Apr 09, 2008 (Resource News International via COMTEX)—Plans by the Government of the Ukraine to boost annual rapeseed production to at least 7 million tonnes in coming years from its 2008 estimate of 2.3 million is expected to have only a minimal impact on Canadian canola shipments, according to industry participants. However, they did acknowledge that it could change the make up of who Canada exports canola to in the future, with Pakistan one of those countries.

«The plan by the Ukraine to boost its canola production will mean it will have more product available to supply some of the countries Canada has been shipping to,» Greg Kostal, an analyst with Kostal Consulting Inc., in Winnipeg, said.

He said if the Ukraine Government is successful in boosting rapeseed output to 2.0 million tonnes in 2008, that extra 800,000 to 1.0 million tonnes of supply will likely be shipped to Europe's biodiesel sector. Exports or rapeseed were also expected to go to Pakistan, in which the Ukraine has some close ties.

Canada has been shipping between 400,000 to 500,000 tonnes of canola to Pakistan on a crop year basis over the past couple of seasons, he said.

Kostal said if that happens a «reshuffling» in the canola export market would be likely.

«If Canadian canola shipments to Pakistan are displaced by Ukrainian rapeseed, then it is likely China would be a targeted destination for the commodity,» Kostal speculated.

Much of the production increase in the Ukraine rapeseed crop will be for the European biodiesel market, Chris Beckman, an oilseed analyst with the market analysis division of Agriculture and Agri-Food Canada said.

He said European canola output has been falling short of the biodiesel requirements on an annual basis, and the Ukraine hopes to fill that void.

«Any increase in rapeseed output from the Black Sea region is probably destined for Europe at this point,» Beckman said, noting that because of this the effect on Canada's canola export program should be minimal overall.

Beckman also questioned whether the plans by the Ukraine Government to boost rapeseed output will translate into a bigger crop.

«Canola is a very high input crop, utilizing a lot of fertilizer, etc… so it should be interesting to see whether producers in the Ukraine will be able to maximize output in the near term,» he said. «At some point, when the economy of the Ukraine improves, there is no doubt that output should increase significantly.»

Beckman also suggested that the Black Sea region could turn to North America to import better quality canola seed varieties if that should occur.

Kostal also pointed out that the Ukraine is a bit of a riskier country to do business with as well, which should help to work in the favor of Canada.

Canada is currently unable to export canola directly to Europe because of genetic modified import rules.

According to data supplied by the Canadian Grain Commission, Canada, as of January 31, in the 2007/08 crop year, had exported 133,000 tonnes of canola to Pakistan. During the 2006/07 season, Canadian canola shipments to Pakistan totalled 548,800 tonnes.

Date:  09.04.2008

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