The global flaxseed market has been anything but stable in recent years, with production challenges reshaping the flaxseed market. In 2023, both Russia and Kazakhstan—two of the largest producers—experienced sharp declines. Global flaxseed production dropped sharply to 2.70 million tons, a big decrease from the 3.65 million tons in 2022.
This article explores the main challenges facing both conventional and organic flaxseed markets, including Kazakhstan’s production issues, Russia’s export strength, and how these factors impact European customers and the EU market. Additionally, it provides a glimpse into what we can expect from the 2024 harvest.
Kazakhstan’s Flaxseed Production Decline and Outlook for 2024
Kazakhstan, once a leader in flaxseed production from 2017 to 2020, has seen a drastic reduction in production in recent years. Flaxseed production dropped from 1.08 million tons in 2021 to just 361 700 tons in 2023, with weather issues and economic shifts contributing to the decline. Poor yields and unfavorable growing conditions have devastated the 2023 harvest, resulting in a significant 57% decrease from the previous year, when Kazakhstan harvested 845 600 tons.
Additionally, many Kazakh farmers have opted to grow more profitable crops in recent years, further reducing flaxseed production levels. However, current prices for flaxseed are showing signs of improvement, attracting interest in expanding cultivation in 2024 but also in the following years. During the VegOil & Meals Trade conference on June 14, Talgat Aldazharov, head of the Kazakhstan Grain Union, stated:
“It is expected that in the 2024 season, the area planted will increase to 1 million hectares due to the low profitability of other crops and growing demand from China.”
However, recent reports suggest that production in Kazakhstan could increase from 450 000 to 550 000 tons, depending on the final harvest situation and yield per hectare. Nevertheless, this would still represent an increase of 25-50%, compared to the harvest in 2023.
Russia’s Role in the Global Flaxseed Market
Despite a dip in production last year, Russia continues to be the world’s top flaxseed producer. Production of flax in Russia fell from 1.73 million tons in 2022, to 1.41 million tons in 2023, representing a 19% decrease. This reduction in output is attributed to smaller sowing areas rather than adverse weather, setting Russia apart from Kazakhstan’s situation.
Russia’s export abilities remain unmatched, as the country supplied 1.48 million tons of flaxseed to the global market in 2023, holding over 56% of the total market share. China continues to be the largest buyer of Russian flaxseed, which helps strengthen Russia’s position in the market. As global demand for flaxseed keeps growing, Russia’s role in fulfilling this demand is likely to remain important.
Experts in the Russian agricultural market have noted, that if the export of flaxseed continues to grow rapidly, there is a risk of the reintroduction of export duties. This could diminish the profitability of growing flax for export. In light of this, Russia is emphasizing the need to expand its role as an exporter of finished products, particularly flaxseed oil.
Currently, Russia exports approximately 40,000 tons of flaxseed oil annually, but this figure could rise quickly in the upcoming season. New investments are expected to boost export capacity to over 200,000 tons.
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Current Hurdles in Flaxseed Supply
The flaxseed market is currently grappling with several significant challenges. In Kazakhstan, a major issue is the uneven production of flaxseed over the past few years. European customers are particularly feeling the strain, as transportation issues from Kazakhstan have resulted in limited availability and skyrocketing transport costs. Additionally, some Kazakh producers are reporting unsatisfactory quality indicators for the harvested crops. Including higher moisture levels and inconsistent seed color, from flax harvested in 2024 crop.
These quality concerns in Kazakhstan increase the likelihood of Russia exporting more flax to European countries. However, it’s important to note that starting January 1, 2025, the import duty on flaxseed from Russia to the EU will rise to 20%, up from the current 10%. The high quality demands from EU buyers, who routinely test for pesticide residues and HCN acid levels, are further complicating the situation for flax exporters.
Organic Flaxseed Supply Challenges and EU Alternatives
Kazakhstan continues to be the largest supplier of organic flaxseed to Europe. However, with the new 2024 crop still unavailable, Ukraine is temporarily filling the gap in Europe’s organic flaxseed market. Particularly in the weeks following the harvest of 2024. Romania is also emerging as a promising source of EU-origin organic flaxseed; however, EU buyers remain cautious about new origins.
As Kazakhstan reduces its general organic production, Ukrainian and Romanian producers could potentially step up and fill the void left in the market in the next years. This transition could provide some stability to the organic market. However, prices are currently rising, with organic flaxseed now costing 10-20% more than this time last year. This increase is largely due to lack of available quantities from Kazakhstan’s old crop.
Flaxseed Market Summary
As we approach the 2024/2025 season, buyers should prepare for potential price increases for both conventional and organic flaxseed, which are already higher than they were at this time last year. Both Russia and Kazakhstan are set to play crucial roles in shaping the global flaxseed market. Kazakhstan is expected to increase its production for the first time since 2022, while Russia is poised to maintain its position as the leading supplier.
Ukraine and other European producers could step in to meet the growing demand for organic flaxseed in Europe. Especially, when Kazakhstan is reducing its organic production. Right now, the market is feeling the pressure of rising prices, driven by supply shortages and heightened quality demands from European buyers. Looking ahead, how these factors play out will greatly impact the dynamics of the flaxseed market in 2024 and beyond.
Source:
- “Казахстан потерял мировое лидерство в производстве льна” available at:
https://apk-news.kz/statyi/item-4031 (accessed on October 11th, 2024). - “In the new season, Kazakhstan will increase flax crops and intensify exports to China” available at: https://www.apk-inform.com/ru/news/1542079 (accessed on October 11th, 2024).
- “Топ-10 производителей семян льна” available at:
https://eldala.kz/rating/13284-top-10-proizvoditeley-semyan-lna (accessed on October 11th, 2024). - “Kazakhstan remains among the leaders in flaxseed exports” available at:
https://www.apk-inform.com/en/exclusive/topic/1537633 (accessed on October 11th, 2024). - “Сейте лён: спрос на эту масличную культуру в 2024 году вырастет” available at:
https://www.oilworld.ru/analytics/localmarket/347409 (accessed on October 11th, 2024). - “Органическая ложь: как разводят фермеров Казахстана” available at:
https://eldala.kz/specproekty/20150-organicheskaya-lozh-kak-razvodyat-fermerov-kazahstana (accessed on October 11th, 2024). - “Урожай масличного льна в Казахстане в 2024/25 МГ увеличится более чем на 40%” available at: https://oleoscope.com/news/urozhaj-maslichnogo-lna-v-kazahstane-v-2024-25-mg-uvelichitsja-bolee-chem-na-40/ (accessed on October 11th, 2024).
