CNS Canada — A flat flax market in Western Canada has buyers feeling indifferent about this year’s prospects.
“There’s no big hurrahs right now on flax… I hate to say it, I’m a very optimistic type of person, but it’s kind of a flat market right now,” said Ben Friesen, senior market manager at Scoular Special Crops.
For the past year the flax market has been pretty steady with no big changes, according to Friesen. Brown flax has hung around the $12.50-$13.50 per bushel range.
At Ilta Grain, senior commodity trader Mike Allaire said they have been buying flax at prices even lower than that over the last year.
Current bids, he said, are around the $11.50-$12 per bushel range, with bids on average falling around $12-$12.50 per bushel for the past year. However, he doesn’t remember buying any flax in the last year for more than $12.25 per bushel.
The low prices and flat market are due to loss of market share overseas. The Black Sea region has upped its production of all crops, including flax, and is undercutting Canada’s prices in the Chinese and European markets.
“It’s just a lot cheaper to ship from (the Black Sea), freight-wise, and they’re happy with quality as well. So that’s taking away from us,” Allaire said.
Last year’s crop was one of the best Allaire has seen, quality-wise, but as a trader he just hasn’t been able to beat the prices at which other countries are selling flax.
“We’re (exporting) a little bit more to the U.S. this year because of their small crop. But the unfortunate thing about it is that we probably have the best flax quality I’ve ever seen in my life and we’re not able to export it overseas.”
The outlook for principal field crops released by Agriculture and Agri-Food Canada on Feb. 16 predicted flaxseed prices will be between $12 and $12.75 per bushel for 2018. Flax acres are expected to decrease from 1,040,300 in 2017 to 1,037,800 this year.
Agriculture and Agri-Food Canada’s prediction doesn’t surprise Friesen, who expects to see a slight dip in flax acres.
“I do believe that they will, due to different reasons… I don’t know if (acres will drop) terribly significantly but they will probably slack off a bit.”
Neither Scoular nor Ilta have new-crop pricing out yet for flax. Allaire hasn’t heard any inquiries yet from grain buyers with Ilta about flax prices.
Overall, it has been a bleak year so far for the Canadian flax industry. In January the Flax Council of Canada shut its physical office in Winnipeg, saying it would continue to operate online with a single part-time employee.
— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow her at @AshleyMR1993 on Twitter.