News > Day Two > Biodiesel to fuel greater demand for oilseeds
Canada’s canola producers can expect world demand for canola oil to grow, according to Thomas Mielke of Oilworld, an independent authority on oilseeds and oilseed meal.

Oilseed expert Thomas Mielke of Oilworld delivered an overview of the oilseeds market at a session at Farm Tech on Thursday. -- Alexis Kienlen photo

Mielke, from Hamburg, Germany, says Canada has produced two record canola crops in a row, and both crops were consumed with no big carryout.

Mielke believes canola oil will drive prices for canola seed -- and he sees no reason to follow the Chicago futures market blindly.

“There is a strong demand for vegetable oils and it’s still a struggle to satisfy the demand for food and non-food products,” he said.

Canola is the most dynamic oil outside of soybean and encompasses 14 per cent of global oil production. Canada and the European Union are the biggest players in the canola market.

Soybean supplies have been declining in the past two years. Sunflower oil is also in short supply and this will raise dependence on palm and canola oils, Mielke says.

The soybean market will affect the canola prices for 2010, he adds. “If soybean oil share goes up to 50 per cent or more, you will benefit because you have a high-oil-yield product,” Mielke said to a group of largely western Canadian producers.

He expects canola will bring a premium over soybean oil in the future.

Oil demand will continue to grow as global demand for biodiesel increases, he says.

And Mielke believes challenges lie ahead, as the world struggles to increase global production of agricultural crops to meet demands raised for both food and fuel.

-- Alexis Kienlen is a field editor for Alberta Farmer in Edmonton.