The yellow mustard market was as hot as its taste last week.
Bids soared to a range of 26 to 45 cents per pound. The previous week bids had been 18-28.6 cents.
The reason for the jump was unexpected European demand.
It has been raining in Eastern Europe, impeding the harvest of late crops.
John Duvenaud of Wild Oats Grain Markets Advisory in Winnipeg says western European buyers often get some of their supply from the Czech Republic and Hungary. They panicked when rain stopped that harvest.
Read Also
Green lentil market oversupplied
Farmers in Western Canada can expect price pressure on their new crop of green lentils, as the available supplies among the world’s major lentil-growing nations increase significantly.
Canada is the only other supplier and the harvest of yellow, brown and oriental mustard here is estimated to be down by about 50 percent because of drought. Fearing they would be unable to get supplies otherwise, price wasn’t an issue for the European buyers.
At 45 cents a lb., that’s $22.50 per bushel.
The question now is will the price stay up, go higher or fall?
No one is sure.
Steve Gadient, senior special crops merchandiser for Saskatchewan Wheat Pool, said this kind of price spike causes most buyers to reassess their needs.
For example, buyers will probably not want to hang onto large and expensive stocks, so they could start buying more hand to mouth.
And while we normally think of yellow mustard as the condiment we put on hotdogs, a lot of it goes into processed meats and other food to add zing.
Processors start looking at other additives when mustard gets too costly.
That’s what happened the last time prices spiked, about four years ago, Duvenaud said.
The reduced demand hurt prices in the following years, leading eventually to reduced acreage and production.
That said, neither analyst expects a sharp price drop this year.
The price could easily retrace to the 25-30 cent range again, but that is still a welcome level, given last winter’s price forecasts of 15-17 cents a lb.
Working against a further fall is that producers will keep a tight grip on what product they have and there will be no other mustard harvest around the world until next year.
We started the crop year with fairly large mustard supplies of about 100,000 tonnes of all types. Stocks could be almost zero by the end of the crop year, possibly prompting a big increase in seeding intentions next spring.
