Stalled demand from a key international buyer has caused a build-up of flax inventories in Canada, with more crops on the way.
Demand on the ingredient side of the flax market has been steady, said Mike Popowich of TA Foods in Yorkton, Sask.
“But we’ve experienced a bit of a slow-down on the exports. There are ongoing issues with processed flax in China.”
The Flax Council of Canada and government officials are working to resolve the issue, he added.
China began rejecting flax shipments last July because of a lack of import standards, an online release from the Flax Council of Canada said.
The restriction still applies to food grade flax.
China has never had a specification for processed flax for human consumption, “but they started to make something about it over the last year, which has kind of hindered our exports there on cleaned or milled flax,” Popowich said.
That has created a volume build-up in the North American market, though the market has held mostly steady, despite the stockpiles.
“Prices are fairly stable, they’ve pretty much flat-lined, since harvest,” Popowich said. “The supply is still out there right now.”
As for up-and-coming crops, most look generally OK, though market watchers are paying attention to areas of concern in southern and southwestern Saskatchewan.
“That’s led to some speculation, and some farmers holding onto their flax,” Popowich said.
Delivered elevator flax prices in Western Canada are sitting $11 to $12 per bushel, according to data from Prairie Ag Hotwire.