NewsEurope's Hemp Farmers Struggling to Keep-Up With Soaring Demand,...

Europe’s Hemp Farmers Struggling to Keep-Up With Soaring Demand, Finds New Report

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THE soaring global demand for hemp is demonstrated in the latest CanXChange Benchmark Report which shows that 60% of this year’s European crop has been pre-sold – with orders already placed for 2022.

CanXchange, which went live in February 2020, is a physical commodity exchange and wholesale data provider for industrial hemp and its many derivatives including; shives, fibres, CBD and seeds. 

The exchange has over 250 fully-vetted customers with clients in over 25 countries and €50m of trade-able inventory from Europe, the US and South America.

This second edition of its quarterly Benchmark Report highlights some significant developments in the hemp and non-psychoactive cannabinoid industry.

Supply Cannot Meet Demand

Speaking to BusinessCann Co-founder and Chief Financial Officer Sigfried Legeay, a former EQF/FX trader with BNP Paribas, elaborated on some of its key findings.

It reports this year’s European industrial hemp harvest is unlikely to meet the growing demand.

He said: “The market for hurds, shives and for every product that is used from an industrial point of view is growing significantly.

“Some of the bigger co-operatives – the ones which have diversified into a range of products – are telling us that they cannot supply the demand of the customer and are already negotiating contracts for the 2022 season.

Sigfried Legeay

“For example, our interview with Jean-Philippe Perrin from CAVAC Biomatériaux – one of the biggest co-operatives on the continent with a well developed R&D capability and extensive product line – shows it is experiencing a significant rise in demand from the textiles industry for hemp cotton, for household hemp items and it reports the hemp packaging market is also an emerging trend.

“Whilst the car industry is mainly focused on the battery and electrification, for now, there is a big shift underway in the construction industry to hempcrete and insulation panels with hemp’s capability as a carbon dioxide absorber and as a catalyst for the transition to a carbon-neutral world driving this demand.”

Covering 30,000 European Hectares

These findings have emerged from the report’s new feature; the CanXchange Farmers Sentiment Index (CFSI) which surveyed over 100 farmers/producers across Europe. 

Its participants farm some 30,000 hectares of Europe’s 50,000 hemp hectares, with respondents looking to boost future crops by around 20% 

They are expecting to sell more than 80% of their production with weeks of negotiation still to go and almost two-thirds having pre-sold their crops.

The report finds there is still some variance in prices across the European marketplace depending on geography and farm size.

“Bigger farms have a more positive and better sentiment as they have a bigger customer base and mix, and having reached a critical size, they will benefit from economies of scale,” said Mr Legeay. 

Across the multiple hemp derivates CanXchange reports on the dominance of the CBD, CBN and CBC isolate market by the North America players saying: “Prices on isolates coming from the US are coming in at €400- €500 per kg which blows European competition out the water as cheapest European produced isolates are closer to the €1000 per kg mark.”

It reports the CBD oil market remains competitive for European players and reports on the growing demand for water-soluble isolates as drinks’ manufactures explore the market for CBD infused drinks.

CanXchange is currently focused on the European players but has recently allowed access to the platform for territories outside Europe through an Agency Service Model with the aim of delivering trading capabilities in North America in early 2022.

The CanXchange platform was launched with a seven-figure funding round and recently closed on a second such round to support its growth.

The Exchange is currently feature almost 50 different products across seven different categories.

This quarter’s Benchmark Report features interviews with Swiss compliance and traceability start up Cannavigia as part of a regular new feature on Cannabis Tech business.

There is also an interview with Jean-Philippe Perrin, Technical Materials Market Manager at CAVAC Biomatériaux about the 2021 harvest, the current trends and opportunities for the industrial hemp sector.

For a copy of the report click here.


Peter
Peter McCusker is an experienced news and business editor, who believes it’s time to fully embrace the multiple, proven, medical benefits of the cannabis plant.

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