China will continue to increase imports of Canadian flax, but some Chinese importers aren’t just looking for flax seed.
Linda Braun, executive director of the Saskatchewan Flax Development Commission, says they also want consumer-ready food products.
When Braun participated in a Saskatchewan Trade and Export Partnership mission to China In September, she talked to Asian buyers about Canadian flax production to Asian buyers, held business meetings and tried to get a better sense of what Chinese customers were looking for.
“All of the markets were interested in importing flax seed. In Yantai, that was the main emphasis,” she said.
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“When we moved to Beijing, we saw the same interest in flax seed, but we also saw heightened interest in flax meal. In Shanghai, there were more people interested in the human health benefits of flax. So they were more interested in the retail value-added product, and how they could incorporate it into their home.”
CanMar Grain Products president Cecil Werner said it’s going to take time to develop a flax value-added food market in China, but there is a big sales potential there.
CanMar is a Saskatchewan company that already sells value-added flax products in China.
“Domestic flax seed is very cheap in China, but the Chinese like imported products with attractive packaging,” Werner said.
“Distributors want a huge markup, especially in Mainland China. So a product the sells for $7 or $8 in Canada might go for $45 over there. The people in China often see the cheaper prices for the same products on websites in Canada. This poses a big problem. The products are naturally going to be cheaper in Canada, but why so much cheaper is a question some consumers will be asking.”
It is difficult to find distributors in China who have the means and connections to develop a market and stay in the market over the long term, Werner said.
CanMar sells food grade whole and milled roasted golden flax seed in China and is trying to break into the ingredient market for food such as cereal and ice cream.
There are cultural and language barriers to overcome, but Werner said the biggest problem with selling flax as food in China is educating consumers about the crop’s health benefits.
“There is energy and money being spent trying to get accurate information to consumers there,” Werner said.
“It’s being done in a fragmented way now, but I think it would be much more effective if there was a consolidated effort to get good information out to the public there.”
China’s increased demand for Canadian flax couldn’t have come at a better time for an industry still reeling since Europe shut the door to Canadian flax over GMO contamination.
Average flax sales to Europe were 384.1 tonnes per year from 2005-06 to 2009-10.
That fell to 21.2 tonnes in the first 11 months of 2011-12.
Flax sales to China accounted for 11 percent of Canadian flax exports less than three years ago. This year, close to 50 percent of Canadian flax exports will end up in China.
“I think if you watch by the end of the year, they will have increased their volume considerably. It’s good news for farmers in the industry,” Braun said.
