Winnipeg, Oct. 19 - The price of Canadian mustard has risen significantly over the past few weeks as a result of lower production in both Canada and Europe, said Stan Skrypetz, Pulse and Special Crops Analyst with Agriculture and Agri-Food Canada.
According to Agriculture and Agri-Food Canada, mustard ending stocks for the 2007-08 crop year are estimated at 20,000 metric metric tons. This was revised downward from earlier estimates in mid-September of 45,000. Accordingly, prices per ton currently range from C$590.00 to C$620.00, up significantly from earlier price estimates of C$460.00 to C$490.00.
Skrypetz said three factors are contributing to the current high prices.
"There is a very tight market for a number of reasons. First, Canadian production fell and is much lower than was previously anticipated. The second reason is that European production declined. The third factor is that a lot of what has been produced in Canada is under contract, so that means there is a small amount on the free market. A good chunk of it is contracted so not a lot is free to be sold in the spot market."
He said the highest prices are for yellow mustard. The market for yellow mustard is mostly in Canada and North America, he said, although Europeans sometimes will buy it. The market for brown mustard is mostly in countries such as Canada, the U.S., France, Belgium and Germany, he said. He said a lot of Oriental mustard goes into the Asian markets and the eastern European market.
Walter Dyck, manager of mustard-seed dealer and processor Demeter Agro in Alberta, said he doesn't think the current price of mustard will significantly impact the amount of mustard Canada is able to export.
Elwood Lawrence, a consultant with The Mustard Bin in Regina, Saskatchewan, said he thinks buyers of Canadian mustard will show more caution than in 2002 when prices rose to 70 cents per pound.
Dyck said Canada may see more mustard acreage next year as a result of the high prices.
"In this case I do think that we'll see an increase in mustard acreage for 2008 but it's a matter of how much," he said. "Contract prices rose in 2007 from 2006, but we still saw the second- or third-lowest number of mustard acres in 20 years. I'd like to think that there will be more acres but another factor you have to look at are the values of other commodities such as canola, wheat and barley. If there is a perception that those prices will be high, it will take away some of the shine from mustard."