Dec. 6 (Bloomberg) -- Canada’s canola stockpiles in the second half of 2011 will be reduced as exports and processing in the marketing year through July will reach a record, according to Hamburg-based researcher Oil World.
Stockpiles will fall 40 percent to 1.1 million metric tons, Oil World said today in a report. The amount of the oilseed processed will rise 5.7 percent this year and shipments will total 7.7 million tons, up 6.9 percent, the researcher said. China has increased imports of canola as domestic output falls and processing facilities open in the Asian country, according to the report.
“Record canola exports and crushings will squeeze Canadian canola supplies in the second half of this season,” Oil World said. “Exports were again unusually high in October. Chinese import requirements have increased due to reduced domestic production and the recent opening of four new crushing plants.”
The price of canola traded on ICE Futures Canada has dropped 14 percent this year, partly on speculation that slumping economies in the European Union and U.S. will curb demand for raw materials used to make food.
Oil World raised its estimate for Canadian exports and processing to 14.4 million tons in the year through July, according to the report. Canola exports from Canada from August through November increased 9 percent and processing, or crushing, gained 8 percent, Oil World said. Production in the year through July will gain 5.3 percent from the prior 12 months to 13.8 million tons, according to the report.
Canadian production may have to rise as high as 15 million tons next year to a record to satisfy prospective world demand in the 2012-13 marketing year, Oil World said.
“Attractive canola prices will be needed in January through April 2012 to stimulate a further expansion of plantings to accomplish an increase in Canadian canola production,” the researcher said.
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