(Resource News International) –– Canada’s smaller flaxseed crop will mean a reduction in exports for 2010-11. However, for what’s moving, new protocols in place for genetically modified seed mean a large portion of the exports will again head to Europe.
Agriculture and Agri-Food Canada is currently predicting flaxseed exports in 2010-11 of 550,000 tonnes, which would be down from 650,000 in 2009-10.
Of that export projection total, “it’s a mix between Europe and China,” said Chris Beckman, an oilseed analyst with Agriculture and Agri-Food Canada’s market analysis division in Winnipeg.
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The export number was down on the year due to reduced production in Western Canada, and the expected higher prices that will discourage some demand, he said.
During the 2009-10 marketing year, the discovery of trace amounts of genetically modified seed in Canada’s flaxseed supply hindered exports to Europe, but China picked up that slack and total exports were up on the year.
“China remains a very price-sensitive market, so we’re expecting demand will back off there a bit,” said Beckman. However, he said, demand in Europe remains strong, despite the disruptions over the past year.
Beckman said the new protocol on testing seed in Canada should add some stability to the marketplace, and should support exports. “It’s adding some certainty to the process,” he commented.
As of Sept. 1, any flax entering the commercial system must undergo extensive testing for the presence of CDC Triffid, the GM variety that found its way into fields across the country despite never being commercially produced.
The testing will increase costs to producers, but is also necessary to meet the strict requirements for shipments to the European Union, according to the Flax Council of Canada.
“I think we should see pretty steady demand this next year,” one grain company flax exporter said, adding that “we have the bugs worked out of the trade with the GM issue in flax.”
While the smaller crop will limit the total export program, the grain company official said farmers are still holding onto large flax supplies from the previous year.
“They will be rewarded with higher values for the flax this year,” he said, adding that “I think the market will need to entice farmer deliveries.”
According to the latest Prairie Ag Hotwire data, flaxseed bids can currently be found as high as $11.89 per bushel in Alberta, $12.25/bu. in Saskatchewan, and $12.66/bu. in Manitoba.
