Canada is about to be dethroned as the world’s top flax exporter.
APK-Inform, a Ukrainian-based agribusiness consulting agency, is forecasting that Kazakhstan will export 550,000 tonnes of flax in 2018-19, a 48 percent increase over last year.
By comparison, Agriculture Canada is forecasting 400,000 tonnes of Canadian flax exports.
If those projections prove accurate, it would be the first time in decades that Canada lost its grip on the top spot.
Kazakhstan grew 881,000 tonnes of flax in 2018, according to APK, compared to 494,000 tonnes of Canadian production, according to Statistics Canada.
Russia and Ukraine have also quickly become major producers and exporters of the oilseed, but APK has not published any recent estimates for those two countries.
The growth in Black Sea production means more competition for Canadian flax in foreign markets such as China, said Wayne Thompson, executive director of the Saskatchewan Flax Development Commission.
“It doesn’t squeeze us out of the market entirely by any stretch of the imagination,” he said.
“But it definitely puts pressure on us in the Chinese market, and that has a lot to do with the fact that Kazakhstan and Russia share the border (with China), so logistically (they are) a lot closer.”
Thompson said the good news is that flax demand in the country has grown significantly over the last two years as the government promotes healthy food.
Roland Thiessen, president of Prairie Flax Products, a processor near Portage la Prairie, Man., was taken aback by APK’s production and export estimates for Kazakhstan.
“Wow,” he said.
“That’s amazing. I’m sure it will have a significant impact, especially on our exports.”
He expects it will be difficult to compete with Kazakhstan in China but doesn’t anticipate much competition in the company’s other markets such as Central and South America.
Belgium is the top buyer of Kazakhstani flax followed by Afghanistan and Poland.
Thiessen believes that much of the flax headed to Belgium and Poland is processed and the oil shipped to China and other Asian countries.
Oil World’s estimate for Kazakhstani production is smaller than APK’s at 700,000 tonnes, but that is still much larger than Canada’s estimated production. Oil World is forecasting 600,000 tonnes of Russian production. It did not have a number for Ukraine.
“There’s a larger supply of flax in the world than we’ve had for quite a while,” said Thompson.
However, he said Canada’s flax is sought after for its superior quality characteristics.
China is by far the top customer for Canadian flax, and it seems to have a preference for Canadian product.
Ming Hai recently opened a crush plant south of Saskatoon that sells flax oil to its business partner, Tianjin Mhjiaye Co. of China.
Thompson believes more Chinese companies will build crush plants in Western Canada to supply the Chinese market with high quality oil and seed.
Thiessen said Canada’s quality advantage over some Black Sea countries is shrinking. He is involved in a farming venture in Ukraine where technology has advanced to the point that crop quality is now approaching Canadian standards.
Canadian crop quality is still an unknown this year. Early harvested crops were good, but a lot of the crop remains unharvested. Two-thirds of Saskatchewan’s crop was still standing in the fields as of Oct. 1.
“The longer it stays out in this kind of weather the more the quality goes down, so it’s definitely going to have an effect on it,” said Thiessen.
Saskatchewan Agriculture is reporting average yields of 22 bushels per acre, which is in line with the long-term average. But again, a lot of the crop remains unharvested.
“What we’ve heard is that it tends to be a bit on the light side, probably a poorer than average crop,” said Thiessen.