Mustard market in Ukraine: growth of oilseed crushing and finished product exports despite a crop decrease

03.01.2018

Mustard, being a niche crop in Ukraine, accounts for less than 1% of oilseed plantings. According to official information, roughly 41 Th ha was seeded to this crop for the 2017 harvest (down 9.5% year-on-year). Its planted acreage has been shrinking for a third season in a row from the 2014 high of 105 Th ha, reports UkrAgroConsult.

Despite high marginality of this oilseed (over 100%), many Ukrainian growers traditionally consider it as a reserve crop used for emergency reseeding. As they seek to minimize costs, i.e. to save on mineral fertilizers and plant protection, mustard yields are not high.

Mustard has various uses: it is seeded in the fields and patches after harvest and then turned into the soil as green manure. Mustard seeds are used for making mustard oil, canning foods and cooking. Mustard flour is used in pharmaceutics and cookery. However, the largest portion of mustard seeds are processed into prepared mustard.

Prepared mustard is a product category in the market of sauces, seasonings and spices. As this is a specific product, it finds a limited consumer market. Prepared mustard occupies at most 2% of the sauce market.

The previous year 2016 featured a turning point for mustard producers as foreign demand for prepared mustard increased and a few-year market decline was overcome. As expected, the current year 2017 sees further growth, up to a six-year high.

Finished product exports continued expanding in the first three months of the current 2017/18 season (up 81.8%), while mustard seed exports decreased (down 11.8% year-on-year).

Meanwhile, according to UkrAgroConsult, no significant expansion of mustard plantings in Ukraine should be expected in the immediate future. However, in view of the current situation regarding oilseed export taxation, it is quite probable that many growers may partially switch to alternative oilseeds – this will particularly concern small and medium-sized farmers. As a result, mustard planted acreage may increase to some degree, but its growth will be curbed by limited demand due to specificity of this oil crop.

Full version of the article is available to subscribers for weekly market report “Black Sea Vegoils” and “Online market review” by UkrAgroConsult.

 

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