Canada has lost its lucrative food-grade flax market in the European Union due to contamination from genetically modified (GM) CDC Triffid flax, an industry official told flax growers meeting here last week.
“From the food industry side Canadian flax is now excluded (from the EU),” Rick Hallock, manager of eastern meal marketing for Richardson International told the Manitoba Flax Growers Association’s annual meeting here March 4. “They have right in their contracts ‘no Canadian flax.’ Canada has basically owned this market on the food industry side, and Richardson in particular, we’ve played a large role in that.”
In the meantime, others are poised to fill the gap, he said.
Canadian exporters are even reluctant to export flax to industrial markets for fear shipments worth millions will be rejected, he said.
The EU, which has zero tolerance for GM flax, found traces of CDC Triffid in shipments last summer. The variety was approved in Canada but pulled from the market in 2001 before it was commercialized.
Canada’s flax industry is trying to eradicate Triffid and pushing to have the EU testing tolerance bumped up to 0.1 per cent from 0.01 per cent. If that happened, Canada would have little difficulty meeting it, Hallock said.
The EU normally accounts for 60 to 70 per cent Canada’s flax exports.
One Triffid seed in 40,000, or the equivalent of one seed in 3,400 loaves, is enough to reject a 5,000-tonne cargo of flax worth almost $3 million, he said.
Two different labs cleared a Richardson flax shipment only to have the Canadian Grain Commission test positive after it was loaded on a ship.
“That’s like playing Russian roulette,” Hallock said.
Richardson already has 22,000 tonnes of flax worth $11 million stuck in EU port silos “that we can’t get in or out.”
Until Triffid is all cleaned out, or the EU accepts tests for flax in bins before they’re loaded on ships, or the tolerances are increased, it’s too risky for Canadian companies to export flax to the EU, Hallock said.
“If we can’t find that common ground that will facilitate exporting we’ll be in a position where we will see other countries expand their (flax) production whether it’s Ukraine-Russia or countries such as Argentina,” he said. “Once the cat is out of the bag it’s hard to put it back in.”
Canada’s flax industry isn’t suffering alone. The EU’s flax-crushing and -processing sectors have been devastated, Hallock said.
“Basically the industry is in ruins,” he said. “These people we sold product to in good faith and repackaged it and sold it and moved down the chain.
“Some of the people we have supplied have got warehouses of flax products returned stacked to the roof.”
Many of the EUs flax crushers are smaller, family-owned enterprise. Hallock said one crusher burned 25,000 tonnes of flax meal at a cost of 30 euros a tonne and wants 12 million euros in compensation.
TRIFFID FALLOUT: CDC Triffid contamination has cost Canada its food-grade flax market in the European Union. And given the risk of cargo rejection Canadian
flax exporters are reluctant to ship any flax to the EU, said Rick Hallock of Richardson International.
“Product has been recalled all over Europe,” he said, triggering millions of dollars in lawsuits.
WON’T BE BULLIED
Hallock said the EU won’t be bullied into changing its regulations. Eric Fridfinnson, a farmer from Arborg and past president of the Flax Council of Canada agreed.
“It ties directly into the culture of their people,” he said. “They take their food consumption and the quality of their food much more seriously than we do here.
“It’s a different mentality. I suspect I will be occupying a very small piece of reality, like two (feet) by six, by the time they take any serious change in their outlook on GMOs.”
Fridfinnson said he believes Canada should focus more on exporting flax oil, which is GM free, to the EU.
“It’s going to be very difficult to move flax until we can clearly demonstrate there’s confidence in it and we’re a long ways from that,” he said.
The problem, Hallock said, is to get Canadian crushers to switch from canola to flax. Canada would also be abandoning the EU crushers that have relied on Canada.
Hallock pointed out some idiosyncrasies in all of this. The EU hasn’t found any GM flax in flax exported from the United States, Russia or Ukraine even though all are growing Canadian flaxseed.
China is suspected of exporting some of the flax it has imported from Canada to the EU and selling it as organic, Hallock said.
Canada has exported 98,000 tonnes of flax this crop year. That’s offset some of the drop in sales to the EU, which as of January were down 38 per cent or 187,500 tonnes from the same period last crop year, according to Canadian Grain Commission statistics.
As of Feb. 28 commercial flax disappearance in Canada was 312,000 tonnes, down 11 per cent from a year ago.
Exports of 260,200 tonnes were off 24 per cent.
Hallock said flax carryover stocks as of July 31 are expected to be a record 427,000 tonnes – double the norm.
A 402,000-tonne carryover is expected in 2011, even though flax seeding is expected to fall 27 per cent this spring to 1.2 million acres.
Canada is among the world’s biggest flax producers accounting for 40 per cent of the world’s annual flax production of between two million and three million tonnes and 80 per cent of exports.