Prices and volumes of major hemp derivatives are expected to bottom out soon and start to recover over the next year, according to Canxchange, the London-based commodities trading platform.
Meanwhile, increased sales of hemp fiber for industrial purposes and the potential of hemp seeds in the food sector may strengthen the industry as a whole, Canxchange sales manager Rory Dyer said on Thursday, at the monthly meeting of the British Hemp Association (BHA).
Dyer said Canxchange’s research among growers indicates that the total acreage devoted to hemp flowers has declined significantly this year, with European growers being crushed by cheap imports of isolates, distillates and oils from the United States, where the cost of production is much lower.
âIt’s been a tough year in terms of pricing,â Dyer said. âBut over the past three months we’ve seen increasing activity in products change hands. Now that the shock of the pandemic has passed, people are buying and selling. “
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Canxchange sees the demand for edible hemp seeds increase due to the increasing popularity of “superfoods”. âWe have weekly requests from food manufacturers,â Dyer said. Likewise, demand is stable for hemp fiber for industrial applications as the trend towards “greener” solutions grows, particularly in the construction industry, Dyer said.
The production of hemp for food and fiber, Dyer noted, can only be viable if supply chains and local markets develop due to the low value and high cost product / transport ratio for these products. . But customers tend to want to buy closer to home anyway, Dyer said.
George Popov, co-founder and COO of Canxchange, told the BHA meeting that these factors provide a clear opportunity to develop localized value chains. âThere are opportunities to specialize in something unique and value-added in the local circular economyâ – with built-in environmental benefits, he said.
Dyer said the raw materials market for industrial hemp continues to remain “opaque,” a challenge that Canxchange is tackling head-on through its suite of trade, logistics and information services designed to connect farmers and reliable producers with good faith buyers on an industrial scale.
Image slowly brightens
As trade expands, the fundamental anomalies that now characterize the market will start to disappear, Dyer said. âWe often see companies located in close proximity to each other that offer similar products but with price differences of 30-40%,â Dyer said. But Canxchange observed that these prices slowly converge over time as the market slowly becomes more transparent.
Predicting “a wait of two to three years before the market itself is truly organized,” Dyer said e-commerce will be key to maturation. Like all other markets, the trade in hemp products will mostly end on the internet, Dyer said. âIt all ends there whether we like it or not,â he noted, suggesting that the coronavirus pandemic is speeding up the digitization process.