Flaxseed: higher tariffs for Russian oilseeds
March 28, 2024 at 11:43 AM ,
Der AUDITOR
EU Commission issues proposal
On Friday the European Commission issued a press release proposing to increase the tariffs on imports into the EU of cereals, oilseeds and derived products (i.e. grain prodcuts) from Russia and Belarus. These include wheat, maize and sunflower meal. Objective is to prevent the destabilisation of the EU, tackle exports of stolen grain from Ukraine and to prevent Russia from using export revenues from the EU to fund its war of aggression against Ukraine. The EU, in fact, imported products worth EUR 1.3 billion (USD 1.4 billion) from Russia in 2023. Due to the country's close political and economical ties with Moscow the increased tariffs will also apply to Belarus. Transits to third countries will, however, remain possible.
The EU's flaxseed imports from Russia will also be impacted and the question is when the higher import duties will be issued. Assumption is also that they will not change anytime soon after they have been raised. Russia currently is the most important flaxseed supplying country for the EU and shipments have even doubled this season. As production has dipped and quality is an issue Kazakhstan cannot supply the normal volumes at present. China has also increased buying sharply.
As buying interest has shifted towards Russia and Kazakhstan in recent years, growing has been sharply reduced in Canada. Yields have also dipped here in the last few years. Canadian flaxseed, therefore, offers no immediate alternative for buyers in the EU. Hope is that growers will seize the day and increase output. Yet, Agriculture and Agri-Food Canada estimates that this year's area sown will range 16% lower than last year at 200,000 ha meaning that even if yields should be higher there is no possibility for production to rise and current estimates stand at 260,000 mt. This only amounts to 25% of the volumes Russia and Kazakhstan are able to produce in a good year. Raw seed prices have already started to rise and supplies are limited. Yet, the market has not responded in such a panicked way as at the start of the pandemic or when Russia started the war in Ukraine.
View more
- price chart, flaxseed, brown, 99.9% purity, Eastern Europe
- more price charts
View related articles
