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2020-05-15 03:54

Russia has become a leader in oilseed flax export

In 2019 Russia exported 549 thousand tons of oil flax, which is 38% more than in 2018. In value terms, the volume increased by 49% to USD 220 million. From 1 January to 3 May 2020, exports amounted to 117 thousand tons worth $51 million.

Last year oil flax from Russia was supplied to 46 countries. The largest buyer was Belgium, where 205 thousand tons worth $81 million were sent. - by 26% more than 2018. Virtually the same volume was supplied to China - 197 thousand tons worth $81 million, while the year of shipment to this country increased by 2.9 times in money equivalent. Also, the top five buyers include Mongolia ($11 million, 4.2 times more), Poland ($9 million, -2.8%) and Italy ($8.5 million, 2.1 times more).

Kudryash flax seeds (oilseed flax) contain up to 48% oil. Products made from agriculture are used in food and feed industries, as well as in the form of technical raw materials for paint, soap, electrical and leather industries. According to Rosstat, over the past 10 years, the gross yield of flax kudryash in Russia increased 7.5 times and in 2019 reached 651 thousand tons in weight after processing. The Siberian Federal District (34% of the gross harvest), the Urals and the Volga region (19% each) are the leaders in the country's oilseed flax harvest.

Russia is among the top 3 largest world producers after Kazakhstan and Canada. In the period from 2009 to 2018 the world production of oilseed flax increased 1.5 times to 3.5 million tons. According to FAO statistics, in 2018 Russia accounted for 16% of global production (Kazakhstan - 26%, Canada - 19%).

These same countries have been the largest exporters of flaxseed in recent years. In 2019, world exports of flax amounted to 1.9 million tons for a total of $895 million. At the same time last year, Russia for the first time came out in first place by the cost of external supplies, overtaking Canada. The world's leading importers of oilseed flax are Belgium, China and Germany.

Last year, the world export of flaxseed oil was estimated at $235 million, while the largest suppliers to the global market are Belgium, Kazakhstan and Russia.

According to the FAO forecast, by 2024 we can expect an increase in demand for flaxseeds on the world market by 21% or 400 thousand tons to 2019 level, and for linseed oil - by 260 thousand tons or more than twice.

For Russia oil flax is mainly an export commodity. Export development remains the main driver of domestic production and increasing its investment attractiveness. At the same time, the culture still faces the problem of lack of reliable markets due to unpopularity of niche oils among the Russian population and instability of export demand.

Oil flax has a limited segment in the global market, where Russia has to compete with Canada and Kazakhstan, says Dmitry Rylko, General Director of the Institute of Agricultural Market Conditions. Against the backdrop of declining production in Canada, the demand for oil flax in the world has been high recently, and generally it tends to grow. Therefore, this culture certainly has potential. However, in the future the situation will largely depend on the production volumes in the competing countries: thus, this year we expect to see record planting areas in Kazakhstan. With a significant increase in production, the market may become oversaturated and the price may sink.

At the same time, the potential of the export direction is connected with the increase of domestic processing of oilseed flax and, consequently, with the increase of added value of shipped products. Until 2018 there were practically no foreign sales of flax oil from Russia, which amounted to less than $1 million. In 2018, there was a trend towards growth: at the end of the year, exports amounted to 7.9 thousand tons worth USD 6.3 million, in 2019 this volume increased by 3.8 times.

According to the Oil and Fat Union of Russia, the projected export of linseed oil in 2020 will amount to about 40 thousand tons. Linseed oil is a type of narrow niche oils, it is consumed in limited quantities for medicinal and preventive purposes. In Russia, the modern culture of linseed oil consumption is not yet fully developed, said Mikhail Maltsev, Executive Director of the Oil and Fat Union. At the same time, he added that due to the development of coronavirus infection the commissioning of oil flax processing facilities may be postponed.

According to the Federal Centre Agroexport, the list of potential consumer countries of Russian oilseeds and linseed oil primarily includes European countries (Poland, Denmark, Greece, Great Britain, Czech Republic, Switzerland, Bosnia and Herzegovina), as well as Japan.

Manufactured in Russia // Made in Russia

Author: Anatoly Petrov

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