Prairie flax bids fall over Europe’s GMO concerns

(Resource News International) — Cash bids for flaxseed in Western Canada have taken a dramatic turn for the worse. with some of the decline being linked to European concerns the crop contains genetically modified organisms (GMOs).

There were reports that Viterra has lowered its bids in Manitoba to as low as $6.78 a bushel, which would be down significantly from bids in the province ranging from around the $10/bu. level just a few days ago.

A number of elevator companies across the Canadian Prairies are believed to have halted their flax buying program all together.

“While details on why flax bids have dropped so sharply in Western Canada remain sketchy, there are rumours circulating that a cargo of Canadian flaxseed has been prevented from being unloaded at a port in Europe,” said Mike Jubinville, a market analyst with ProFarmer Canada in Winnipeg. “All the signs point to GMO issues.”

Barry Hall, president of the Flax Council of Canada, confirmed that European labs have been testing Canadian flaxseed and initial analytical results indicate the presence of NPTH, a genetic marker, in some samples.

While this, in itself, does not prove that the flaxseed is genetically modified, many buyers are indicating this to be the case, Hall said.

Hall stressed there are no GM varieties of flaxseed registered or commercially produced in Canada.

The Winnipeg-based council was working closely with the Canadian Grain Commission and its Grain Research Laboratories to come up with an explanation, he said.

“This development could not have come at a worse time for the Canadian flaxseed industry,” both Hall and Jubinville said, noting that at this time of year sales of Canadian flaxseed to Europe generally begin to be put together.

Between 500,000 to 700,000 tonnes of Canadian flaxseed, or roughly two thirds of Canada’s production, are shipped to European destinations on a crop-year basis, Jubinville said.

“Flaxseed bids had been starting to weaken prior to this news as the western Canadian crop looked to be larger than first anticipated and as carryover stocks of the commodity begin to move towards burdensome levels,” Jubinville said.

Statistics Canada is currently projecting a 2009-10 Canadian flaxseed crop of 915,000 tonnes, which is larger than expected and up from the 2008 level of 861,100 tonnes.

Prior to the grain companies pulling their bids for flaxseed, cash bids for flaxseed delivered to the elevator in Saskatchewan based on Prairie Ag Hotwire data were $9.35-$9.79 a bushel, in Manitoba $9.90-$9.92 and in Alberta around $8.53.