Bids for oil and confectionary varieties of sunflowers have been holding steady, but are lower than the year-ago level, as competition from other exporters has depressed values in Western Canada.
The availability of cheaper, easier-to-move alternative commodities has also placed downward pressure on western Canadian sunflower bids, according to sunflower experts.
Bids for the oil type of sunflowers are sitting between 25 and 27 cents per pound, down slightly from last year when prices were in the low 30s, said Bruce Wiebe, sunflower/birdfood manager for Keystone Grain at Winkler, Man.
Bids for confectionary sunflowers, meanwhile, now sit between 15 and 28 cents per pound, also down from more than 30 cents last year, said Randy Fisher, general manager of Nestibo Agra at Deloraine, Man.
Prices need to remain low in order for Canada to compete with export markets in other countries such as China, Argentina and Bulgaria, he said. Their closeness to major sunflower importers makes trade costs cheaper, he added.
"We used to do 250 containers a year into the Middle East. Now Argentina and China have that market because of their pricing. It also takes 45 days for Canada to ship, whereas for them it takes 15 to 20 days," Fisher said.
Prices are also likely to stay low because sunflower seeds aren’t viewed as a necessary import. If Canadian prices strengthen, then investors might look towards cheaper commodities that have a more consistent demand, Fisher said.
"In order for Canada to compete with other crops, we have to pay a price that is competitive," Wiebe said.
"If you were a broker and you had a million dollars, are you going to buy something that’s not the staple of your diet like sunflowers? You’re going to buy things like lentils, peas and beans," said Fisher.
— Ryan Kessler writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.