The Canadian canola industry : in the context of the world oilseeds complex

Abstract

The Canadian canola industry is strongly oriented towards competing in the world oilseeds complex. World oilseed market conditions and distortions have a very direct and important effect on the prices, production of and demand for Canadian canola products. One of the primary goals of this study was to clearly define the world oilseeds market, including the important players and market distortions facing the Canadian canola industry. A detailed summary of the important commodities, major producers and consumers and relevant policies affecting production, demand and trade are provided. Based on the detailed description of the oilseeds market, and the information available from previous studies, a quadratic programming model was developed to simulate the prices and trade flows for a subset of the most important commodities and regions to the Canadian canola industry. Scenarios of change simulated the hypothetical elimination of the Canadian canola processing capacity constraint observed in 1993-94 and the elimination of the Japanese edible oils tariff. Results of the model suggest that Canadian canola processing was severely restricted by the capacity constraint observed in 1993-94. Also, the study suggests that the Japanese oilseed processing industry would be very vulnerable to imported oil and meal if the Japanese edible oils tariff was eliminated.