Canada’s canola shipments to the European Union may be severely limited this season, with industry sources suggesting exports could reach just 2-4 million metric tons compared to previous expectations.

The constraint stems from certification requirements that restrict Canadian canola exports to biodiesel applications only within the EU market. Not all Canadian canola possesses the necessary certification for this specific use, creating a significant bottleneck for exporters.

This development comes at a critical time as Canada faces ongoing difficulties shipping to China due to antidumping duties. With China representing a major traditional market, Canadian exporters have been looking to redirect volumes to the EU as an alternative destination.

Strong production creates export pressure

StatCan recently published production estimates showing Canada’s canola crop at approximately 19.9 million metric tons, up from 19.2 million metric tons last year. This robust production outlook initially appeared positive for Canadian exporters, but the certification constraints now present a significant challenge.

October typically marks Canada’s peak export month, making the timing of these restrictions particularly impactful for procurement managers planning Q4 and Q1 2026 supply chains.

Market implications for buyers

The certification bottleneck has created a complex supply situation. While Canada prepares to increase EU shipments due to reduced Chinese demand, the actual volumes may fall well short of initial expectations.

One industry source cited a potential cap of 4 million metric tons for EU exports, while another expects volumes to remain below 2 million metric tons. This compares to 1.3 million metric tons shipped in the 2024/25 season.

Meanwhile, China appears to be increasing imports from Australia, though not taking all available volumes, as market participants suggest the EU market may offer better prices for non-GM canola.

European market dynamics shift

The reduced Ukrainian and Australian exports this season mean the EU will rely more heavily on its domestic crop. This dependency, combined with uncertainty around Canadian volumes, is expected to keep European stocks at lower levels throughout the season.

Ukrainian rapeseed shipments in August totaled 520,000 metric tons, significantly down from 800,000 metric tons in August 2024. The Ukrainian crop was revised upward to 3.2 million metric tons but remains well below last year’s 3.75 million metric tons.

Forward market positioning

MATIF rapeseed prices declined by EUR 10 per metric ton to EUR 467 per metric ton, while rapeseed oil prices gained EUR 5-10 per metric ton across key positions. The market continues trading in backwardation with positions remaining close to each other.

For procurement managers, this situation suggests potential price volatility ahead as the market adjusts to constrained Canadian volumes and ongoing geopolitical uncertainties. The certification requirements highlight the importance of understanding regulatory compliance when planning international sourcing strategies.

The combination of strong Canadian production but limited export capacity to key markets demonstrates how regulatory frameworks can significantly impact global commodity flows, regardless of fundamental supply and demand dynamics.


This article is part of our full oils and fats market analysis. Read the full analysis here: https://app.vespertool.com/market-analysis/2242