Export demand for western Canadian flax is expected to increase this year, Jonathon Driedger, senior market analyst with FarmLink Marketing Solutions said in a presentation at the annual Wild Oats Grain World Conference in Winnipeg on Feb. 25.
Driedger expects exports of western Canadian flax to increase to 436,000 tonnes in 2012-13, from 391,000 in 2011-12.
The increase is linked to growing demand for the oilseed in China, and a jump in buying interest from Europe due to production problems in the former Soviet Union.
“In December 2012, we saw more exports of Canadian flax to Europe than we did in all of 2011-12,” Driedger said during his presentation.
But the strong export demand could be short lived, as European demand could start to drop off in 2013-14 if the former Soviet Union has a better crop.
Driedger expects export demand to see a slight decrease, to 400,000 tonnes in the 2013-14 crop year.
But, he said there is the potential for that figure to increase. The demand for Canadian flax from China could continue to grow, as it is on the cheaper side of the oilseed price scale.
Canadian flax could also regain more market share in Europe if the former Soviet Union experiences crop problems again.
Driedger said that Europe may not want to become too dependent on the former Soviet Union for their flax needs, and could start to look into importing crops from elsewhere, including Canada.
The increase in demand should leave tight ending stocks in 2012-13, with Driedger projecting about 91,000 tonnes to be left over at the end of the year, from 137,000 tonnes in 2011-12.
An increase in acres is expected in 2013-14, which should relieve the tight stock situation. Driedger expects 1.1 million acres of flax will be planted in 2013-14, up from 980,000 in 2012-13 and ending stocks should rise to 137,000 tonnes.