- Bearish supply shock: Australian canola output reached 7.65 million tonnes in 2025/26, 420,000 tonnes (5.8%) above ABARES’ December forecast, adding unexpected supply to global markets.
- Record Western Australian crop: Western Australia’s all‑time high production significantly boosts raw material availability for canola meal processors.
- Weak EU demand: EU rapeseed import demand has fallen 43%, sharply reducing Ukrainian export volumes and intensifying oversupply concerns.
- Price pressure on Black Sea origins: The combination of higher Australian output and lower EU imports is bearish for Black Sea rapeseed prices and margins.
- Oversupply risk into Q1 2025: Without a demand rebound, traders face continued downward price momentum and tighter profitability in remaining export markets.
Australian Canola Production Surprise
Australian canola production for the 2025/26 season reached 7.65 million tonnes, according to data cited by Chinese analytics firm SunSirs. This outcome exceeded the Australian Bureau of Agricultural Resources, Economics and Science (ABARES) 2 December forecast of 7.23 million tonnes by 420,000 tonnes, or 5.8%, adding a notable volume of unanticipated supply to the global rapeseed complex.
| Season / Region | Metric | Volume (million tonnes) | Difference |
|---|---|---|---|
| Australia 2025/26 | ABARES forecast (Dec 2) | 7.23 | — |
| Australia 2025/26 | Actual production | 7.65 | +0.42 vs forecast (+5.8%) |
| European Union | Rapeseed import demand change | — | -43% year-on-year |
Western Australia’s Record Harvest and Meal Supply
Western Australia led the upside surprise, posting record-high canola production. This exceptional regional harvest substantially increases raw material availability for the canola meal processing sector, improving crush utilisation prospects and reinforcing the global surplus of oilseed by-products.
Global Rapeseed Market Impact
The stronger-than-expected Australian crop has accelerated downward pressure on rapeseed prices. With additional supply entering a market already facing lacklustre demand, analysts flag growing oversupply risks and weaker spot values unless consumption or discretionary demand from crushers and biodiesel producers picks up.
EU Demand Slump and Black Sea Rapeseed Outlook
Bearish sentiment is reinforced by the European Union’s 43% reduction in rapeseed import demand following its improved domestic harvest. Ukraine has seen the steepest decline in export flows to the bloc, facing increased competition from Australian origins and a narrower pool of buyers. Black Sea rapeseed exporters now contend with thinner margins and heightened price sensitivity in alternative markets.
Forward View: Oversupply Risk into Q1 2025
The combination of higher global oilseed production and subdued import demand suggests continued downward price momentum into Q1 2025. Traders will be monitoring whether lower price levels stimulate additional demand or whether oversupply conditions persist, further eroding competitiveness and basis levels for Black Sea rapeseed relative to other origins.
Source: Market Data
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