Rural & Agriculture
26 May, 2026
Increased local crushing capacity key to scaling up canola production
EXPANDING domestic crushing capabilities will be key to scaling up Australian canola production in the future, Rabobank says in new industry research.
A new report released by Rabobank suggests Australia has the capacity to lift its average annual production of canola – the country’s primary oilseed crop – to around seven million tonnes a year over the next 10 years, up from recent annual averages of 6.5 million tonnes.
This is made possible by “structural gains” in cropping area, genetics and agronomy practices, it says.
However, the report – Harvesting the future: How far can Australia scale canola crushing?, by the bank’s RaboResearch division – cautions that without a material expansion in domestic crushing capacity, canola’s production growth will likely “remain incremental and variable”.
Report author, RaboResearch senior grains and oilseeds analyst Vitor Pistoia says growing global demand for biofuel has seen Australia’s canola sector respond with significant supply growth in recent years, however this has primarily been in the form of increased canola seed exports to be crushed off shore.
“Australia’s export-led system has responded to global demand growth largely through higher canola seed exports rather than by expanding domestic crushing capacity (to enable oil exports),” he said.
“And this has limited the extent to which that demand growth is translated into local value-adding, job creation and more stable domestic price formation.”
The report says expanding local canola crushing capacity could result in improved price stability and boost grower confidence.
“Regions in Australia with higher canola-crushing density already exhibit more stable pricing dynamics than export-dependent zones such as Western Australia,” Mr Pistoia said.
“Expanding crushing capacity in Australia would absorb surplus supply, stabilise basis and reduce volatility, creating a positive feedback loop that supports grower confidence, sustained area and long-term supply growth.”
Today, canola accounts for roughly 14 per cent of Australia’s winter cropping area compared with approximately 28 per cent in Canada, where a large crushing industry underpins stable demand.
Mr Pistoia said expanded domestic crushing in Australia would support a lift in total winter canola cropping area and more persistent canola plantings over time.