Canada’s Canola Oil Shortage
TODD KOROL/REUTERS
The price for canola oil is increasing and alternatives are now being broadly used with some families unable to afford the high-priced commodity.
Prices for canola encountered record highs as Western Canada experienced a massive heatwave. The conditions ruined the yield of the crop in early August, skyrocketing the price of canola by 41 per cent.
A report from the Western Producer suggested that most crops disintegrated because of the little rain they received, making anything that survived more precious. Some farmers told the media that most of the crops were being eaten down by pests such as grasshoppers and mice.
Canada accounts for 74 per cent of the world’s canola exporting trades and produces 20 per cent of canola products. In the canola industry, there are 207,000 people employed, with $12 billion spent on wages in the business according to the Canola Council.
Statistics Canada showed that 876,127 tons of canola were crushed this October, down by about 55,000 tons from the same month the previous year. However, it was over 100,000 tons from September. In the 2021/22 crop year, the total canola crush is 2.316 million tons through the first three months. This number is only down by nine percent from the 2.547 million tons crushed during the same time the former time. However, even with further canola being crushed, the prices for canola oil remain the same.
Canola seed and oil produced in Canada are entrusted to 50 markets around the world. China, Japan, Mexico, and the United States are generally Canada’s largest import markets. This time, however, China is buying only limited volumes of Canadian canola due to low inventories and unaffordable prices. According to a China-grounded trader, China is buying most of its canola oil from Russia and Ukraine. Alongside that, Canada’s canola exporter guests are now relying heavily on lower producing countries on alternative vegetable oils similar to palm and soybean oil adding to global buildup.
Grocery stores such as Superstore have increased the price of canola oil. Before October, the price for canola oil used to be around $5.99; prices are now $8.99.
The entire Canadian canola exports in 2021-22 are currently forecast at only 5.5 million tons by the government agency. A report in 2020-21 presented 10.534 million canola crops were exported that year. In 2021-22, the canola exports were down by half of the exports from the former time.
Canola composition in Saskatchewan is anticipated to contract 47.2 per cent to 5.8 million tons; Alberta is anticipated to contract 17.1 percent to 4.3 million tons; and in Manitoba, yield is anticipated to fall 21.3 percent to a normal of 32.6 bushels per acre.
The total ending crop in 2020-21 is 1.767 million tons which is much higher than the stocks in 2021-22 which was 500,000. This is the tightest shipment in 13 years.
Starting on August 1 the first seven weeks of the new canola crop began. During those weeks, Canada exported 388,000 tons of canola - a 71% drop from the former time.
The foodservice industry has also been affected by increased oil costs at the same time restaurants are facing a labor deficit. Some restaurants are using vegetable oils to fry some of their food.
During this time, there are numerous ways to save money when not purchasing canola oil. Choosing oil with a longer-lasting period, especially in frying applications like chicken nuggets or french fries, is one way to save money. Another way to save money is to turn to indispensable options such as vegetable oils.