Manufacturers dismiss Italy's 'wheat war'
At a time when the price of almost all food commodities are on the rise, the price of grain is falling and Italian growers are feeling the crunch. According to senior market analyst at Mintec, Yuliya Nam-Wright, the price for wheat in Italy is at a six-year low for most types (durum, bread and biscuit).
“Partly this fall could be seasonal, but there may be other reasons behind these falls, as prices now reached a multi-year low," she said.
“Cheap Ukrainian currency (hryvna) is making Ukrainian exports more attractive. In addition, exports from Ukraine have received a boost after a free trade agreement was signed between Ukraine and the European Commission on 1 January 2016, which made it easier to export Ukrainian grain to the EU."
The result is that Ukrainian wheat imports increased fourfold in 2015, rising to 579,000 tonnes and making Ukraine the third largest import origin for Italy after Canada and France.
Wheat wars
This has sparked calls for action. Coldiretti, the organisation that represents the Italian agricultural sector, estimates that in 2015 Italy imported around 4.8m tonnes of common wheat which covered half of the demand for bread and biscuits, while 2.3m tonnes of durum wheat - around 40% of what is needed for domestic pasta production - were imported from foreign markets.
It sees this as "speculative purchasing" from foreign markets that has cost Italian businesses around €700 million and is putting the livelihood of over 300,000
farmers at risk, and it organised a march across Italian cities this summer during which thousands of farmers took to the streets to protest.
Meanwhile, in two separate written questions to the European Commission (which has yet to respond), MEPs Mara Bizzotto, a member of the Europe of Nations and Freedom party chaired by Marine Le Pen, and Isabella Adinolfi of the eurosceptic party, Europe of Freedom and Direct Democracy, asked whether the Commission intended to act.
Bizzotto's question reads: “Prices of durum wheat for pasta production and of wheat for the manufacture of bread and other bakery products have fallen by more than 42% since 2015, reaching levels which do not even cover production costs.
"In view of the calls by producers and their associations for protection of their work and the calls by consumers for better traceability, can the Commission indicate whether it intends to introduce a compulsory origin labelling system which provides clear information, in the case of both pasta and bakery products, concerning the origin of the flours used in production? [....] and how it will support cereal production in Italy in coping with this crisis?"
Adinolfi asks whether the Commission intends "as a matter of urgency, to curb and reverse the serious interference with the correct operation of market forces, with particular reference to prices of durum wheat and common wheat in EU member states".
Quantity & quality
But if some stakeholders are speaking of a wheat battle and crisis, manufacturers see otherwise.
Mario Piccialuti, director of AIDEPI, the trade association that represents Italian past and confectionery manufacturers, told the Corriere della Serra: "We have no prejudice against Italian wheat - indeed we would be happy, for logistical reasons, to use only domestic raw material. But [...] from a quantitative point of view, national durum wheat is not enough.”
Luigi Ganazzoli, vice president of purchasing at Italian pasta heavyweight Barilla reiterated Piccialuti’s comments that it cannot source enough wheat domestically to cover its needs.
Around 70% of the durum wheat Barilla uses to make pasta in Italy is Italian with the rest comes mainly from North America and France. The pasta it makes for the US market is made with wheat sourced entirely from North America.
But quantity is not the only issue. Barilla told us that while the southern regions of Italy normally produce high quality durum wheat with a high protein content - ideal for making pasta - this has not been the case this year meaning much has been exported to North Africa to produce couscous, which requires a lower protein content.
Ganazzoli said the company has not felt a big impact in terms of the cost of its raw materials despite the fall in the market price.
“Every year we agree with farmers the price mechanism, then part of the volumes are contracted with minimum prices and/or fixed prices, both designed to cover production costs and ensure a proper margin for farmers. In addition, we always recognise a premium for farmers who supply high quality durum wheat,” he told FoodNavigator.
Made in Italy
For Coldiretti, a solution to the problem is to promote country of origin labelling and 'Made in Italy' products, and it says the scale of the issue is being compounded
policymakers - at both a national and EU level - dragging their feet on origin labelling.
When asked about calls for mandatory country of origin labelling on pasta products, Ganazzoli said: “Barilla favours maximum transparency for consumers, but we don’t make the rules.”
Barilla has a premium brand called Voiello, sold mostly in Italy, which is made with Italian wheat.
Both Bizzotto and Adinolfi also said an increased reliance on imported wheat, particularly from North America, would raise Europeans' exposure to plant protection chemicals, such as glyphosate. This was dismissed by Barilla which said the herbicide is also authorised in the EU, although not at the same levels as other countries.
