Canola is an important Canadian and world crop. Approximately 38 million MT (USD 7 billion) were grown worldwide in 2000, 7 million MT (USD 1.3 billion) in Canada. Currently, canola is grown primarily for its oil which is used extensively in the food industry. Additionally, it is also becoming increasingly important in the European bio-diesel industry. The oil makes up approximately 40% of the canola seed. The 60% of the seed remaining after crushing and oil extraction is known as canola meal and is sold as a low value feed ingredient in animal nutrition markets.
Canola is dependent upon two products to drive demand, oil and meal. This is in sharp contrast to soybeans, the world's leading oil seed, which is grown for the oil but also for the myriad of other food ingredients generated from the non-oil portion of the bean. The large number of products created from soybeans provides diversification of market and demand, resulting in stable crush margins and steady profitability. Canola, with only two products to drive demand, has experienced much greater volatility in crush margins.
| World | Canada | |
|---|---|---|
| Canola production | 37.5 | 7.1 |
| Canola crush | 35.7 | 3.0 |
| Canola meal production | 21.3 | 1.7 |
| Soybean production | 172.4 | 2.7 |
| Soybean meal production | 116.1 | 1.4 |
Source: Agriculture Canada
If the Canola business is to continue to grow, it must create new products and new sources of demand. MCN's technology addresses this need.
