Grain buyers around the world are howling over rising prices.
But while most buyers complain, few appear able to walk away from the table.
“That’s pretty limited,” said Gord Flaten, the head of the Canadian Wheat Board’s sales department.
“There are some who are looking at their cost of inputs and making changes (but) there are pretty limited opportunities to find something to substitute for wheat or durum.”
Globally, buyers are almost powerless in the wheat market today.
In other hot rallies, buyers delayed purchases and used their existing stocks to wait out the rally.
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But today, many have already consumed most of their stocks waiting for the sustained rally to end.
Flaten said many buyers have been buying only two to three months ahead of when they need the grain, rather than an average of six months out, so they can’t cut their buying much more.
“There’s a realization that high prices may be with us for some time to come, so we see some customers buying a little further out now,” said Flaten.
If anything, buyers might favour expensive spring wheat over super-expensive durum, said Flaten.
“But the experience for some pasta manufacturers has not been very positive when they try to use spring wheat. Their quality has gone down and that affects their brand reputation.”
