Oilseeds

Czech blue poppy seeds: “The market has adapted to the situation”

December 22, 2021 2:00 PM, Der AUDITOR
CROPFUL s.r.o. in Chlum u Třeboně, Tschechien
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SEEHEIM/CHLUM U TREBONE. This year, the AUDITOR editorial team has prepared something special to shorten the waiting time until we are back with daily reports on 10 January 2022. We have spoken to a number of different commodity trading experts and will publish these interviews in the coming days. First up is Andrea Vronková, blue poppy seed expert at CROPFUL s.r.o. in Chlum u Třeboně, Czech Republic. She talks about the adversities and hurdles the Czech blue poppy seed market has faced this year, the positive experiences she made and the expectations she has for the coming year 2022.

What issues were the most difficult ones for the Czech blue poppy seed market to face in 2021? Were they mainly related to the lingering threat of the worldwide pandemic or do you think they would also have occurred in a more normal year?

In 2021, the poppy seed market quickly adapted to the pandemic conditions and market players already had experience from the pandemic year 2020.  In most cases  there were no big hurdles during this year‘s pandemic situation. The market did not face any major problems. Demand for poppy seeds came in bigger waves throughout the year.

It can be said that the market has adapted to the situation. Traders/buyers/sellers have learned from previous pandemic developments and started to predict the consequences that a pandemic can bring. That's why we think most companies were well prepared and could continue with their trade and plans. For example our company continued to build new office spaces in the Moravia region, developed a corporate identity and a new logo, in addition to working with new clients from abroad, we are now also able to provide further marketing and management.

The pandemic rather caused logistical problems in the transport sector, which have affected all of us. At the end of 2021, the political problems between Poland and Belarus caused further transport issues, mainly to the eastern European markets.

In most markets, prices for feed and food commodities went up significantly over the course of the past year. Blue poppy seeds are no exception to that. Do you think buyers will have to adjust to these higher levels in the long run or do you expect prices to decrease again?

Poppy seed farmers and producers have to invest tens of percent more in fertilizers, seeds, sprays, herbicides, energy, human labour. An increase in the poppy seed prices can therefore be expected. At the moment, the acreage in the Czech Republic for the new crop is estimated to be approximately the same size as in 2021, which means that the initial situation will be the same, but much will depend on the yields per hectare and on the willingness of producers to sell their goods.

Blue poppy seeds are a very specific commodity on the market and we think that the Czech Republic has a world market share of 70-80%, which is why developments there strongly influence international prices. In the last few years, the area under cultivation has stabilized, there are no fluctuations as in previous years. Therefore, in our opinion, market fluctuations are now the most decisive factor - not the pandemic situation, but rather the climatic conditions during the growth of the poppies and the final production volume.

Did the demand situation change compared to 2020 and 2019? Do you think some buyers and processors had to readjust their needs?

Demand is approximately the same as every year. In 2020, the pandemic caused demand waves. Overall, however, Czech poppy seed exports and total consumption are still at about the same level. The pandemic certainly had an impact on demand, especially in terms of a reduced consumption, but it was not as bad as expected or predicted. Leaving aside the first two months of 2021, the price was very balanced during this year, even more than in the last few years. In spring the price for poppy seeds was around EUR 2.00/kg.

Logistical issues like high freight costs, a lack of containers and truck drivers as well as closed ports were problems faced by the food and feed commodity market. Is there a lesson to be learned from that going into 2022?

Yes, there were such traffic problems like a lack of trucks and drivers, closed ports etc. There is a different situation in trade and commerce every day. Therefore, it is necessary to adapt and learn from these past events. Of course, we will all try to get out of this situation.

Lessons to be learnd might be for example a shorter journey from producers to the final consumer. It is necessary to plan ahead. Basically, both sellers and buyers need to be more patient, more adaptable to the situation, and more understanding. It is necessary to deliver the goods in the agreed quality and to avoid any complaints. Due to logistical problems, complaints accumulate, which can cause further problems for companies such as cash flow issues and more.

Additionally, climate change and crop concerns are real and pose a threat to all kinds of food and feed commodities around the world and will most likely continue to do so. How would this affect the blue poppy seed market in the future and what could companies in this industry do to improve this situation?

Strong weather fluctuations and unfavorable growth conditions for poppy seeds showed their impact mainly in the years 2018 and 2019, when, due to the extreme crop losses, the prices  of poppy seeds rose to EUR 4.00/kg.

In the Czech Republic, 40,000 ha were sown. During the growth phase, growers expected a larger crop than in 2020. However, adverse climatic conditions that did not favor the growth of the poppy plants ultimately caused the yields per hectare to be lower than in 2020. This means that the total amount of poppy seeds harvested in 2021 is about the same as last year. These crop losses are to be expected in the coming years. In 2021, yield declines occurred only locally. While in previous years the regions suffered from drought, it was now excessive rainfall and under these conditions, it is impossible to give the poppies what they need to grow successfully.

The climate change is, of course, a major threat to the planet, and everyone should think about what they can do to improve the environment. In every sector, each opportunity must be taken to reduce emissions and improve the situation. Our family company has bought and afforested the land and we personally help and organize the planting of new trees.

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