Winnipeg | CNS Canada –– The inelastic demand for Canada’s mustard crop is expected to keep prices well supported, as the country is the major world supplier and end-users need to make sure the acres keep going in the ground.
“There’s no substitute for mustard,” Walter Dyck of Olds Products told the annual Wild Oats Grainworld conference here Tuesday, noting end-use customers were “a captive audience.”
Export demand was steady at about 125,000 to 130,000 tonnes per year, he said, with about 65,000 tonnes of that total consisting of yellow mustard going to the U.S.
The European Union will purchase about 30,000 tonnes of brown mustard, and 10,000 tonnes of oriental mustard will go to Japan, and the remaining exports will be split up amongst smaller markets.
With demand holding steady, the mustard market often can see large price swings depending on Canadian production. Dyck said the stocks-to-use situation was currently on the tight side, at least for yellow mustard.
That should keep prices strong heading into the 2015-16 crop year in order to keep the acres in rotation, he said.
Dyck said contract yellow mustard prices were in the 37-38 cents per pound area, which compares with spot bids of 34-36 cents per pound.
While much of the mustard is contracted, he expected spot prices would eventually rise to come in line with the contracted levels.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.