Gloss comes off canola prices

Canola has lost its golden glow with prices falling to around $625/tonne at port in Victoria.

Canola’s golden crown is slipping, with prices dropping to around $625 a tonne delivered to ports in Victoria.

Several factors have combined, including a sizeable domestic crop and the current conflict in the Red Sea, to hurt canola prices.

Windrowed canola being harvested at Cobram. Picture: Rural Logic

Market Check chief executive Nick Crundall said the canola price had rallied up to $40 in the past couple of weeks, as the offshore market improved.

NSW farmers are receiving around $645 a tonne for the crop, which is slightly better than returns in Victoria.

“The Red Sea conflict is not great news,” he said.

Ships carrying Australian canola must sail through the Red Sea to reach Europe.

Mr Crundall said there appeared to be a small amount of canola stored on farm. However, plenty of canola in storage depots had yet to be sold.

The Australian Oilseeds Federation projected the latest crop at around 5.59 million tonnes, making it the third largest on record.

Back in August last year canola was making up to $735 a tonne but dropped after harvest.

Rupanyup farmer and Grain Producers Australia southern region director Andrew Weidemann Picture: Supplied

Rupanyup farmer and Grain Producers Australia southern region director Andrew Weidemann said canola prices had been declining for a while.

He said that given the cost of growing the crop, with the seed alone at around $100 a hectare, farmers would carefully consider whether to plant it this year.

“In marginal areas, lentils might be an option instead of canola,” he said.

Agronomically, canola forms an important part of the cropping rotation; however, given its price and the cost of inputs, it may not be as popular in 2024.

“For some people, it is a weed management and control tool,” he said.

“It is also a very expensive crop to grow for inputs; the price of gypsum and urea all adds up,” he said.

Mecardo analyst Nick Booth said the Red Sea was an essential trading route for canola, with ships going through the area.

He said the region is the world’s most important trading route, carrying goods and commodities from oil and gas to raw foods.

“The Red Sea is a vital maritime corridor linking the Mediterranean via the Suez Canal,” he said.