December 9, 2009 / 8:47 PM / 11 years ago

Canada flax not shipping to EU, key port to close

WINNIPEG, Manitoba (Reuters) - Canada has not shipped any of its new flax crop to its top market, the European Union, because of concerns about genetically modified (GMO) material, the Flax Council of Canada said on Wednesday.

And the window of opportunity is closing as the crop’s most important port nears closure for the winter.

The European Union, which traditionally buys 70 percent of Canada’s flax, first detected GMO material in a Canadian flax shipment in July. There is no GMO flax approved in the EU, where consumers are wary of long-term GMO effects.

Although the EU has not banned all flax imports from Canada, exporters deem shipments to the EU risky even with Canada and the EU agreeing on testing protocols.

Flax shipments travel from Western Canada to the Port of Thunder Bay, through which they reach the Atlantic Ocean. The port’s shipping season typically ends in late December when its harbor on Lake Superior and the Welland Canal joining Lake Ontario and Lake Erie freeze.

There has been talk in the industry about exporters making test shipments to Europe, but Flax Council president Barry Hall said he’s not aware of it.

“I don’t think anything has shipped at all.”

Shippers could move flax by rail to the St. Lawrence Seaway or through Port Metro Vancouver on the Pacific Coast, Hall said, but added those options may raise concerns about logistics and distance.

Canada is the world’s largest producer and exporter of flax — also called linseed — that produces oil for industrial use like linoleum flooring and seed for baked goods.

Canadian farmers grew an estimated 930,000 tons of flax this year, according to Statistics Canada.

GMO flax has also turned up in Japan, Canada’s No. 3 market, leading to checks of all flax for food use.

With the key port to Europe about to close, farmers will store more flax than usual over the winter, said Allen Kuhlmann, chair of the Saskatchewan Flax Development Commission.

Longer storage times, plus cash prices that are C$3 per bushel lower than usual at C$8-C$9, means many farmers face hard times, he said.

“People rely on flax as a cash crop in fall to pay their inputs. If they haven’t been able to move the product, then they’re sitting with their bills unpaid.”

Farmers may also sour on flax enough that planted acreage could shrink next year, he said.

FP967 is the only GMO flax variety ever produced. A Canadian university researcher developed it in the 1990s and officials in Canada and the U.S. authorized it for use in feed and food. The flax industry successfully lobbied the Canadian government to deregister it in 2001 and acquired most of the seed to be destroyed or crushed domestically.

($1=$1.06 Canadian)

Editing by Jim Marshall

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