The Canxchange Q1 2022 quarterly benchmark report has revealed that confidence from European hemp farmers is at an all-time low.
The Canxchange team has surveyed over 100 hemp farms and co-operatives across Europe to better understand the outlook for hemp cultivation in Europe.
The Canxchange Farmers Sentiment Index (CFSI) collapsed to -14.5pts (-15 per cent) from its July 2021 high at 111.7pts, showing “a grim market view” in between seasons for flower and hemp biomass producers.
Citing high dissatisfaction for the outcome of the last harvest, pessimist market prospects for 2022, high level of stock and anticipations of lower production for the 2022 harvesting season, the report highlights that these observations are particularly true for concentrated producers of a small and medium-size with no possibility to diversify their products.
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The report notes that there is currently an oversupply of products such as flowers, oils, isolates and cannabinoids, and that and some products are challenging to source despite a need for industrial hemp and seed products.
It states: “On top of this product offer and demand distortion, the market seems to struggle to find price equilibriums across different products and the recent inflation of production costs is not helping the market imbalance.”
Market insight
George Popov, Canxchange trading and sales specialist, provides market insight – exploring extracts, industrial material and seeds.
Popov highlights that isolate prices have plateaued, with occasional drops for orders that exceed standard sizes, and that distillates prices have remained stable until mid-March 2022, when the US market prices took a steep nosedive.
Interest in CBN has dried up suddenly leading to a price drop, with Popov noting that, in the last months of 2021, CBN product was sold prior to producing it, making it “challenging to get CBN on the spot market”.
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Popov stated: “The trend has suddenly changed and top quality suppliers have 50kg ready to deliver on the spot market. The other minors including CBC and THCV have not seen a further decrease after the decrease we reported last month.”
However, press coverage of the potential benefits of CBDa for COVID-19 protection has garnered a large interest in CBDa distillates, and Popov emphasises that this cannabinoid is hard to come by – leading to the chance for producers to significantly increase their prices.
Expert insights
As part of the report’s expert insights, managing director, Switzerland of Curaleaf International, Roberto Algar, discusses price formation and price discovery for cannabis raw materials. Citing the impressive knowledge of customers on what constitutes a quality cannabis product, Algar says today’s market, unfortunately, sees a high number of medium- to low-quality products than high-end, “which can lead to unsatisfied customers”.
Algar stated: “…as we head into a more regulated industry, price will always be important, but should not be at the detriment of the quality of the product.
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“We owe this to the consumers, the patients, our partners, and all other stakeholders in this industry. We want an honest, reliable, and solid industry – not one with customers complaining and new customers fearful of buying. We must build trust.
“We want an industry which helps farmers, not one that perpetrates old habits. We want a sustainable industry, not a one-go short-term profit kind of industry.
“We believe that Cannabis, can help change the world, and it’s our industry’s collective responsibility to make sure that we make the necessary changes for the benefit of everyone.”
The Canxchange benchmark report also breaks down data on product segments. To read the full report please visit www.canxchange.eu/data-and-research.
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