Australia's Canola Output Could Reach 7 Million Tonnes
According to a Rabobank industry report released on 18th May, expanding domestic crushing capabilities is crucial for Australia to increase its canola production to approximately seven million tonnes annually over the next decade.
The report, titled 'Harvesting the Future: How Far Can Australia Scale Canola Crushing?', highlights that recent canola production averages 6.5 million tonnes per year. This growth is attributed to improvements in cropping area, genetics, and agronomy.
Without significant expansion in domestic crushing capacity, the report warns canola's production growth will likely remain incremental. Vitor Pistoia, RaboResearch's senior grains and oilseeds analyst, explained that increased global demand for biofuel has led to higher canola seed exports rather than domestic crushing.
Benefits of Expanding Crushing Capacity
Pistoia stated, "Australia’s export-led system has responded to global demand growth largely through higher canola seed exports rather than by expanding domestic crushing capacity, and this has limited local value-adding and job creation."
Regions in Australia with higher canola-crushing density, such as parts of New South Wales and Victoria, exhibit more stable pricing dynamics compared to export-dependent zones like Western Australia. Expanding crushing capacity could stabilise prices and boost grower confidence.
A comparison between Australia and Canada shows that canola accounts for 28 per cent of winter cropping area in Canada, where a large domestic crushing industry supports stable demand and cropping intensity. In contrast, Australia sees canola making up about 14 per cent of the winter cropping area.
Western Australia is identified as having the most scalable supply expansion potential if domestic crushing increases. The state’s regions, including Kwinana, Albany, and Esperance, already export nearly 45 per cent of national exports.
The report is part two of a three-part series exploring opportunities and challenges in leveraging biofuel production from canola in Australia and New Zealand. The upcoming third part will examine the canola meal sector and its potential growth.
