European Canola prices drag down Canadian competitiveness

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The decline in European rapeseed prices has negatively impacted the value of Canadian canola, according to analysts. The premium for Canadian canola futures over European rapeseed futures has decreased from $92 per tonne on May 17 to $33 per tonne as of June 7. This has affected Canada’s competitiveness in the international canola/rapeseed markets, where the European Union (EU) has become the price trendsetter. Lacklustre rapeseed oil prices have dragged down European rapeseed prices, with rapeseed oil becoming the cheapest among vegetable oils in the EU. The decline in prices has been attributed to factors such as forecasts of a big crop, a significant carryover from the previous crop year, and the impact of imported waste biodiesel on the rapeseed market. The European Waste-based Advanced Biofuels Association (EWABA) has raised concerns about potentially fraudulent Chinese biodiesel exports labelled as waste-based biodiesel, which may be displacing European rapeseed-based biodiesel. This situation has led to depressed rapeseed prices and has affected the canola market. Additionally, the influx of Ukrainian canola exports and the extension of a ban on Ukrainian imports of wheat, corn, canola, and sunflower seeds to certain EU countries have further influenced the market dynamics. Overall, the decline in European rapeseed prices and the challenges in the biodiesel sector has had a significant impact on Canadian canola values.

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