U.S. and Chinese demand for Canadian flax remains strong, but Will Hill, president of the Flax Council of Canada, said that increased import demand from the European market has helped with the boost prices have seen lately.
“From what I’m understanding, Eastern Europe’s crop is not as good as it was two years ago, so they’re continuing to have some problems with quality,” he said. “We have good demand out of China, we have good demand out of the U.S., and I think that with any kind of problems in Eastern Europe, we’re going to see European demand again for Canadian seed, and I think that’s probably what’s holding up the flax price. We’re just seeing that we have a pretty good demand picture here and not an overabundance of supplies.”
Ag Canada’s October principal field crop report had flax exports at 575,000 tonnes for the 2013/14 year, which is significantly more than the 481,000 tonnes the previous year.
Hill said that the current market is very good for Canadian growers, because while yields are extremely good, there isn’t an oversupply of product.
According to Statistics Canada, the 2013/14 flax yield is pegged at 26.4 bushels per acre as of their Oct. 4 crop production report. If that number comes through, it would make this season’s crop the highest yielding recorded in Canadian history.
Despite the high numbers, production is expected to be 664,300 tonnes, which to put in perspective, would only be fifth largest flax crop in the last 10 years.
“Yields have been pretty good from what I’ve heard,” Hill said. “We don’t have a huge crop in Canada and we’re not even close to where we were acreage-wise say pre-2009, so I don’t think the supply is burdensome. As long as we don’t see something unexpected coming from Eastern Europe, I think that’ll continue to put a bit of strength into the market.”
As of Oct. 23, FOB flax in Manitoba and Saskatchewan was worth $12.75 per bushel, which is up from $12.50 per bushel a week earlier.