(Resource News International) — The western Canadian flaxseed cash market remains stagnant in the aftermath of the unexpected discovery of genetically modified flax in a European shipment.
While Canadian flaxseed may eventually find its way into other markets, for the time being bids to farmers are either non-existent or very low, as market participants wait for a resolution to the current issue.
No GM flax has been registered in Canada since 2001. However, the European Commission confirmed the presence of a genetic marker which is common to GM crops, NPTII, in some recent Canadian samples.
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The discovery has put Canadian flaxseed sales to Europe on hold for the time being as market participants wait for firmer details on the matter.
Europe is the largest buyer of Canadian flaxseed, taking over 420,000 tonnes, nearly 80 per cent of all exports, in 2008-09, according to the latest Canadian Grain Commission data.
Flax bids in Western Canada dropped sharply, or were taken away altogether, as the GM issue came to light in early September.
“There’s still no bids, or drastically discounted bids,” said analyst Mike Jubinville of ProFarmer Canada on Wednesday. Available prices were “all over the place,” he said, ranging from the $6 per bushel area to as high as $8.50 per bushel.
With sales to Europe unlikely, at least for the time being, Canada will be faced with the task of finding new buyers for its large flaxseed crop.
Jubinville noted the European demand for flaxseed, normally filled by Canada, will still need to come from somewhere. He thought some will come from Eastern Europe, while U.S. flaxseed could also move to Europe.
If more U.S. flaxseed makes its way to Europe, that would open the door for Canadian exports to the U.S.
“It will take some time to readjust the matrix,” said Jubinville, adding that price incentives need to be put in place in order to encourage such a change in the trading pattern.
Overall, Canada will likely build its carryout of flaxseed, said Jubinville. “We can’t just replace a buyer of that kind of volume.”
CLARIFICATION, Sept. 17: An earlier version of this article stated it’s been illegal to grow GM flax in Canada since 2001. CDC Triffid, the last GM flax to get registration in Canada, was deregistered that year. It is legal to seed and harvest an unregistered or deregistered variety and deliver it to an elevator, but all deliveries of unregistered crops must receive the lowest grade. Furthermore, it’s illegal to sell an unregistered variety for use as seed.
