High prices for Canadian crop had lost domestic produces considerable market share in China to the Black Sea region
Canadian flax is moving to China after a two-year hiatus.
Nine thousand tonnes of flax was exported out of the Port of Vancouver during week 50 of the 2022-23 marketing campaign, according to the Canadian Grain Commission.
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That is a positive development because it has been a long time since any Canadian flax moved to China.
“We were priced out of the world market,” said Robert Deraas, general manager of flax with Scoular.
“It would appear the flax price has levelled at a price that is now competitive in the world market.”
The price on the farm in Western Canada has dropped to $13.50 to $14 per bushel, from last year’s highs of over $30.
Canada lost considerable market share in China to the Black Sea region over the past two years because of those high prices.
That has resulted in a poor export program, mounting supplies and reduced acres in Canada.
Farmers planted about 609,000 acres of the oilseed, a 22 percent drop.
Agriculture Canada is forecasting 325,000 tonnes of production. Deraas thinks it could be closer to 300,000 tonnes based on conversations he has had with growers.
But Agriculture Canada’s number is not out of the question.
The trade believes there is another 200,000 tonnes of carry-in from the 2022-23 crop, which is a “phenomenal number.”
Deraas thinks it could be even higher than that. Agriculture Canada is estimating 275,000 tonnes.
The upshot is that despite a small crop, there will be a normal total supply for the upcoming 2023-24 marketing campaign, he said.
Farmers in the United States planted 132,000 acres of flax, a 46 percent drop from the previous year. There is no official production estimate yet for the U.S.
Deraas has driven North America’s main flax growing area from Fargo to Regina and then again from Fargo to Saskatoon in the past few weeks and has stopped and walked a lot of fields on those trips.
The crop is looking pretty darn good, despite the drought and will “easily” meet average yields for the main flax growing regions of North America.
He has heard that there is some heat stress in the Black Sea region, but acres are up.
“The Black Sea area expects an increase in their production year-over-year,” he said.
Chuck Penner, analysts with LeftField Commodity Research, told delegates attending the SaskFlax annual general meeting in January, that Russia produced 2.3 million tonnes of flax in 2022 and Kazakhstan another 800,000 tonnes.
Deraas had no specific estimate for either country this year, but he is confident that worldwide flax supply will be more than adequate to meet demand in 2023-24.
He characterized global demand for the crop as “strong.”
Deraas is forecasting sideways price movement going forward.
“I don’t see any reason for there to be a short-term or long-term spike, but perhaps we’ve hit our floor at that $14 number,” he said.
And he noted that $14 is historically a pretty good price for the crop, despite last year’s bull run to $30.
