From this weeks agriweek
<b>Shoot that foot
Chinese oilseed crushers recognize an opportunity, fast</b>
The uber-regulators of the European Union remain content to keep the ban imposed a year ago on Canadian flax
seed imports which may contain infinitesimal traces of the variety Triffid. As a result imports are down sharply. European linseed mills have either shut down or switched other seed. But a shortage of linseed oil which quickly developed when the ban was imposed is now gone. <b>China is taking all the seed that formerly went to Europe, crushing it and exporting the oil to the EU.</b> Triffid cannot be detected in the oil. In April, for the first time, China became the
leading importer of Canadian flax, taking 169,000 tonnes in the crop year so far, compared to 166,000 to the EU.
Exports to the EU are half of the 323,000 tonnes sold up to the same date a year ago. China took only 3,000 tonnes of flax in all of 2008-09. <b>If this trend continues Europe will cease to be a significant market and China will replace it.</b>
This may well be the template by which other market disruptions from trumped-up food safety and GMO issues will
be dealt with by regular market forces.
For a time it appeared that Canadian flax could be trans-shipped to the EU through the U.S., which does not face the Triffid ban, but this trade has not developed. Flax exports to the U.S. are similar to those of a year earlier.
<b>For the Canadian flax industry the crisis created by the Triffid ban is effectively over</b>, at least on the level of finding buyers for what is grown. The export market for flax has always been very thin, in recent times entirely concentrated in Europe.
To make the Chinese connection work, there has been an erosion in flax prices to western growers, but not as large as might appear. Last week cash flax prices in Saskatchewan were about $320 a tonne or about 87% of the cash canola price of $365. Averaged over the last two years, flax has mostly sold at about 88% of the canola price. The flax market slid from over $400 a tonne in the late summer of 2009 to under $300 in eight weeks when the Triffid affair broke.
<b>Shoot that foot
Chinese oilseed crushers recognize an opportunity, fast</b>
The uber-regulators of the European Union remain content to keep the ban imposed a year ago on Canadian flax
seed imports which may contain infinitesimal traces of the variety Triffid. As a result imports are down sharply. European linseed mills have either shut down or switched other seed. But a shortage of linseed oil which quickly developed when the ban was imposed is now gone. <b>China is taking all the seed that formerly went to Europe, crushing it and exporting the oil to the EU.</b> Triffid cannot be detected in the oil. In April, for the first time, China became the
leading importer of Canadian flax, taking 169,000 tonnes in the crop year so far, compared to 166,000 to the EU.
Exports to the EU are half of the 323,000 tonnes sold up to the same date a year ago. China took only 3,000 tonnes of flax in all of 2008-09. <b>If this trend continues Europe will cease to be a significant market and China will replace it.</b>
This may well be the template by which other market disruptions from trumped-up food safety and GMO issues will
be dealt with by regular market forces.
For a time it appeared that Canadian flax could be trans-shipped to the EU through the U.S., which does not face the Triffid ban, but this trade has not developed. Flax exports to the U.S. are similar to those of a year earlier.
<b>For the Canadian flax industry the crisis created by the Triffid ban is effectively over</b>, at least on the level of finding buyers for what is grown. The export market for flax has always been very thin, in recent times entirely concentrated in Europe.
To make the Chinese connection work, there has been an erosion in flax prices to western growers, but not as large as might appear. Last week cash flax prices in Saskatchewan were about $320 a tonne or about 87% of the cash canola price of $365. Averaged over the last two years, flax has mostly sold at about 88% of the canola price. The flax market slid from over $400 a tonne in the late summer of 2009 to under $300 in eight weeks when the Triffid affair broke.
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