Flaxseed Prices Explained

Oilseed experts warned consumers of fluctuating flaxseed prices as the commodity’s top country producers experienced low harvest output and tariffed grain imports. Kazakhstan’s production shrank as the country battled the changing weather systems. The country’s Bureau of National Statistics reported that about 96,000 hectares of flaxseed crops died due to extreme weather conditions that affected the plant’s yield.

Additionally, the country competes with Russian flaxseed as it ramps up its exports to China and the European Union. However, Russia’s profitability might be cut short as the EU proposed an increased tariff (50%) on imported goods from Russia and Belarus (cereals, oilseeds, and other products). 

Why are flaxseed prices fluctuating?

1. Supply Chain Snags

Ukraine’s conflict with Russia significantly disrupted global supply chains as reduced production and export volumes tightened the market, pushing flaxseed prices higher. Additionally, rising shipping costs and port congestion slowed the smooth flow of flaxseed, further adding to price pressures.

2. Soaring Production Costs

The global fertilizer market is in trouble as prices skyrocket due to factors like export restrictions and supply chain disruptions. Thus, resulting in increased production costs for flaxseed farmers, impacting their profit margins and potentially influencing flaxseed pricing strategies. Furthermore, flaxseed processing is an energy-intensive process that adds pressure to the varying flaxseed prices.

3. Shifting Demand Dynamics

Flaxseed oil is a key ingredient in several biofuel blends. Thus, the growing concerns about energy security and climate change put upward pressure on its prices. Furthermore, flaxseed meal is a valuable source of protein for livestock feed. Increased demand for animal protein bolstered the price of flaxseed as a reasonable alternative.

4. Weather Woes

Generally, flaxseed is a relatively drought-tolerant crop. However, it has limits. Unfavorable weather conditions in key producing regions such as Canada and Kazakhstan openly impacted its yields, contributing to supply shortages and flaxseed price hikes.

Which variables impact the price of flaxseed?

• Supply Chain Snags
• Soaring Production Costs
• Shifting Demand Dynamics
• Weather Woes
• Geopolitical Issues

Where does flaxseed come from?

Flaxseed is a tiny but powerhouse-packed seed with omega-3 and dietary fiber. Additionally, it is cultivated as a food and fiber crop in regions with temperate climates. It was first cultivated in Egypt where it is extensively used in paintings and embalming mummies. Then, it spread across the Mediterranean and Europe through trade.

Flaxseed thrives in cool climates with plenty of sunshine. Farmers sow the seeds in well-drained soil during early spring when the threat of frost passes.

Then, the plants sprout quickly, reaching their full height of around 3 feet within a few months. The slender stems boast delicate blue flowers, adding a touch of beauty to the landscape.

Harvesting flaxseed requires a unique approach. Unlike most grains, it is pulled from the ground. This method preserves the long fibers in the stem, crucial for future fabric production.

Next, the pulled plants are laid in neat rows to dry under the sun. After drying, it undergoes a process called retting. This involves exposing the plant to moisture (through dew or rain) and microorganisms which break down the woody part of the stem, leaving behind the valuable fibers.

After retting, the seeds are separated from the dried stems through thrashing. Also, winnowing removes the lighter chaff, leaving behind the clean and golden flaxseed ready for sorting according to its intended application.

Presently, Kazakhstan leads the global flaxseed production by 31%. Other major producers include Russia, Canada, and China.

What are the uses of flaxseed?

The diversity of flax doesn’t end with food. Here are some of its top industry uses:

1. Nutritional Powerhouse – Rich in omega-3 and fiber, flaxseed finds its way into healthy cereals, breads, yogurts, and even baked goods. Additionally, it’s ground into meals for convenient sprinkling on smoothies and salads.

2. Oil for Fuel and Flavor – Its oil boasts a nutty flavor and has a high smoking point, making it popular for cooking and salad dressings. Furthermore, its biofuel potential is a sustainable energy source.

3. Fabric Fantastic – From luxurious linen clothing to sturdy ropes and twine, the long fibers extracted from flax stems form the base of various textiles. Also, their natural breathability and durability make them a sustainable and stylish choice.

4. Beyond Beauty – Flaxseed extract is incorporated into natural cosmetics and soaps, thanks to their skin-soothing and moisturizing properties.

What is the future price of flaxseed?

The growing popularity of superfoods is the primary trend shaping the global flaxseeds market growth. Additionally, the increasing number of vegans is notably driving its bankability. As a result, the demand for plant-based products will fuel flaxseed prices in the coming years.

Furthermore, the depleted raw materials needed for processing flax continuously declined due to adverse weather systems that influenced the crop’s growth. This adds pressure to the commodity’s availability and market prices. Also, the EU tariff on imported Russian and Belarusian cereals and oilseed products will add volatility to the market. 

On the end-user industries side, the increasing utilization of flaxseed in the nutraceuticals and animal feed opportunity on a segmented market. The commodity contains 40% oil and 55% omega-3 essential oil, a sustainable ingredient for human and animal consumption. 

Reports from Grand View Research predict a CAGR of 5.2% for the global flaxseed oil market (between 2023 and 2030),  translating to flaxseed prices reaching $0.80-$1.00 per pound by 2030.