The highs might be in for the Prairie flaxseed market, with end-users lined in the meanwhile as consideration turns to the 2022 crop.
Analyst Marlene Boersch of Mercantile Consulting stated there’s a higher potential for Canadian costs to transfer decrease than greater, except provides run out some other place in the world, forcing consumers to return to the Canadian retailer. Meanwhile, US finish customers are thought to be lined in the meanwhile, whereas different consumers in Europe and China have entry to flaxseed from Russia and Kazakhstan
“(Canadian flax) is dear relative to different markets,” Boersch stated Tuesday as a part of digital presentation at Crop Production Week in Saskatoon.
Flaxseed bids at the moment high out at about C$41/bu in Saskatchewan, down about $3 over the previous month.
Canada’s freight benefit to Europe has decreased in current years, due primarily to excessive ocean freight charges. That means it’s harder for Canadian flax to stay aggressive with provides from Russia and Kazakhstan that strikes by way of rail, Boersch stated, noting that these two international locations have additionally elevated their flaxseed manufacturing over the previous few years.
Drought circumstances in 2021 minimize into Canada’s flaxseed crop with complete manufacturing down 40% on the 12 months, at 346,000 tonnes, in accordance to Statistics Canada. Boersch estimated that precise manufacturing might have been even decrease, which is able to lead to a really tight carryout state of affairs.
Canadian flaxseed exports are already working properly behind the year-ago tempo, and Boersch questioned if even the comparatively low projection of 300,000 tonnes complete exports for the 12 months would be attainable.
Looking forward to the 2022 rising season, Boersch stated there may be likelihood Canadian flax acres will improve from final 12 months. However, she famous robust competitors from different crops might restrict that improve to solely 5% or so. With a return to common yields, Canadian flaxseed provides may be again up to 600,000 to 650,000 tonnes for the 2022-23 advertising 12 months, which might outcome in a way more comfy stocks-to-use ratio, she stated.