Flax bids weaken on lower demand

Flax prices in Western Canada have declined over the past month — and given the uncertainty of the global economic situation, that trend may continue into the winter months.

Elevator deliveries for flax were bringing as much $13.91 per bushel in Alberta, $13.39 per bushel in Saskatchewan and $13.40 per bushel in Manitoba, according to Prairie Ag Hotwire. Those prices are anywhere from 50 cents to $1.61 per bushel lower than one month ago.

Paul Martin, director of operations with Prairie Flax Products at Portage la Prairie, Man., said a lack of demand was behind the recent price decline.

“A lot of companies have done all their purchasing and have a good amount of supplies in hand,” he said. “Line companies have been dropping their prices as they are getting ready for the winter wheat harvest so they don’t really want to see flax right now.”

Another factor that has brought values down of late has been the unrest in the U.S. and the concerns regarding the global economy.

“The economic worries have been weighing on the market as well,” Martin said. “Flax should stand on its own, but the recent losses in soybeans and canola — because of the economic worries — have provided spillover weakness.”

The larger Canadian flax carryout as viewed in Agriculture and Agri-Food Canada’s supply/demand outlook was also a downward price influence. Flaxseed carryout stocks for the 2011-12 crop year are pegged to be at 230,000 tonnes. AAFC’s previous report had flax end-of-year stocks to be at just 80,000 tonnes.

As far as the developing crop is concerned, Martin said progress varies depending on what part of the Canadian Prairies the crop was seeded.

“Anything that is on the east side of Manitoba has been hit by the drought. In parts of Saskatchewan they are on the late side and still flowering, so the weather that comes up here will be the big variable.”

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