Credit: REUTERS/CHRISTINNE MUSCHIWINNIPEG, Manitoba, April 22 (Reuters) - Cargill Inc [RIC:RIC:CARG.UL] will build a $350-million canola plant in Regina, Saskatchewan, the U.S. agribusiness said on Thursday, in the latest project that aims to profit from booming demand for oilseeds.
Canola futures RSc1 hit record highs this week and soybeans Sv1 have hit multi-year tops as demand for canola to process into vegetable oil and animal feed exceeds supply.
Refiners are also planning to produce renewable diesel from canola and soybeans to comply with government mandates in Canada and several U.S. states to make cleaner-burning fuels.
"There's going to continue to be strong pull, we believe, into countries like China, from a food perspective," Jeff Vassart, President of Cargill's Canadian unit, said in an interview. "We do see increasing demand for renewable diesel too and we want to make sure that we're positioned for it."
The plant will have capacity to crush 1 million tonnes of canola annually.
Privately held Cargill expects the plant to start operating by early 2024, creating 50 full-time jobs.
Cargill said it would also modernize its two canola crush facilities in Camrose, Alberta, and Clavet, Saskatchewan to increase volume.
In March, rival Richardson International said it would double its canola-crushing capacity at Yorkton, Saskatchewan, making it Canada's largest such plant. Cargill also said last month it would expand its U.S. soybean-crushing capacity.
Vassart said the company is confident that Canada will produce enough canola to match demand, as farmers boost yields and, to a lesser extent, expand plantings. If production does not increase enough, Canada may export less canola seed, he said.
Canadian canola stocks are expected to dwindle to an eight-year low by midsummer, but Cargill expects to be able to continue crushing at a strong pace, Vassart said.
(Reporting by Rod Nickel in Winnipeg and Rithika Krishna in Bengaluru; editing by Grant McCool)
((Rithika.Krishna@thomsonreuters.com;))
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