WINNIPEG (CNS) — A flat flax market in Western Canada has buyers feeling indifferent about this year’s prospects.
“There’s no big hurrahs right now on flax…. I hate to say it, I’m a very optimistic type of person but it’s kind of a flat market right now,” said Ben Friesen, senior market manager at Scoular Special Crops.
For the last year, the flax market has been steady, according to Friesen. Brown flax has hung around the $12.50 to $13.50 per bushel range.
At Ilta Grain Inc., senior commodity trader Mike Allaire said they have been buying flax at prices even lower than that over the last year. According to him, current bids are around the $11.50 to $12 per bu. range with bids on average falling around $12 to $12.50 per bu. for the last year. Allaire said he doesn’t remember buying any flax in the last year for more than $12.25 per bu.
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The low prices and flat market are due to loss of market share overseas. The Black Sea region has upped its production of all crops, including flax, and is undercutting Canada’s prices in the Chinese and European markets.
“It’s just a lot cheaper to ship from (the Black Sea) freight-wise and they’re happy with quality as well. So that’s taking away from us,” Allaire said.
Last year’s crop was one of the best Allaire has seen quality-wise, but as a trader he just hasn’t been able to beat the cheap prices other countries are selling flax at.
“We’re (exporting) a little bit more to the U.S. this year because of their small crop, but the unfortunate thing about it is that we probably have the best flax quality I’ve ever seen in my life and we’re not able to export it overseas,” he said.
The Outlook for Principal Field Crops report released Feb. 16 by Agriculture Canada predicted flax seed prices will be between $12 to $12.75 per bu. for 2018. Flax acres are expected to decrease to 1.037 million acres this year from 1.040 million acres in 2017.
Agriculture Canada’s prediction for fewer acres doesn’t surprise Friesen, who expects to see a slight dip in flax acres.
“I do believe that they will (decline) due to different reasons…. I don’t know if terribly significantly, but they will probably slack off a bit,” he said.
Neither Scoular nor Ilta Grain have released new crop pricing for flax yet.
Overall, it has been a bleak year for the Canadian flax industry so far. In January, the Flax Council of Canada shut its physical office saying it would continue to operate online with a single part-time employee.
