Pasta enthusiasts are facing the unpleasant reality of even higher prices for their beloved dish, as a combination of drought in Canada and adverse weather conditions in Europe wreaks havoc on durum wheat crops. This has led to reduced supplies available to flour millers and food companies, causing a ripple effect across the pasta industry.
In Italy, the government convened a crisis meeting in May as the cost of this dietary staple surged by more than double the national inflation rate. The global production of durum wheat is on track to reach its lowest point in 22 years, compelling Italy's renowned pasta manufacturers to explore unconventional suppliers such as Turkey for their primary ingredient.
Toronto-based Continental Noodles, a family-owned business known for its fettuccine and ravioli, experienced the warning signs of trouble when the price of a 20-kilogram bag of semolina flour, milled from durum wheat, skyrocketed by 24% within a matter of weeks in July. This increase pushed the cost to CAD $26 ($19.15). In addition to the wheat price surge, Continental Noodles is also grappling with higher costs for tomatoes used in their sauces due to crop failures in Spain and India.
Vincent Liberatore, one of the owners of Continental Noodles, expressed concerns that prices might escalate further. He indicated that the business would absorb these costs for as long as possible, given the uncertainty surrounding how much more consumers will eventually have to pay.
"The population has tapped out - everything has been going up. The biggest stress for us business owners right now is the unknown - the roller coaster up and down," Liberatore shared.
This year has seen retail pasta prices rise by approximately 12% in Europe and 8% in the United States, as per market research firm Nielsen. The prices of other essential staples like rice have also surged due to export restrictions in India.
The International Grains Council has forecasted that global durum production for the 2023/24 period will hit a 22-year low, resulting in the smallest world stocks in three decades.
Crisis Around the World
The Canadian drought impact is particularly striking. Canadian farmer Darold Niwa's hopes for a plentiful durum harvest were dashed when the Prairies turned dry this summer. Niwa's durum yield plummeted to six to eight kernels per head, a significant drop from the usual 45-52. With yields well below his break-even point, Niwa is anticipating substantial losses.
Canada is a major player in the global durum trade, accounting for about half of it. However, this year's harvest is on track to be the country's second-smallest in 12 years, with an expected production of 4.3 mn metric tons of durum.
"The pipeline in Canada is empty," noted agriculture analyst Jerry Klassen.
The United States is also grappling with a smaller crop due to dry conditions. Spain's production has been hampered by drought, while Italy and France are dealing with mixed-quality crops due to severe weather.
The declining supplies led to a surge in the Euronext futures price benchmark to a six-month high in early August. This spike prompted major importer Algeria to cancel a durum tender in August, only to announce a new tender later.
Interestingly, Italy, heavily reliant on imports to supplement its domestic crops, is diversifying its supply sources. Turkey has emerged as an unexpected durum wheat exporter, with estimates suggesting that its export sales this season have already reached 300,000 metric tons, primarily bound for Italy.
Turkish durum exports have had a cooling effect on Mediterranean and North American durum prices, but experts anticipate a resumption in price hikes when Turkey's supply dwindles in a month or two.
While short-term supply relief has come from Russia, which has shipped over 100,000 tons to the European Union since July, the overall situation remains tense. Pasta giant Barilla stated that it currently sees no critical supply issues, and consulting firm Strategie Grains suggests that pasta makers might have to turn to more soft wheat where regulations allow and consumer income is limited. Durum wheat, known for its firm "al dente" texture, is essential for pasta production and is also used to make couscous in North Africa.
"There's not going to be enough durum to supply the whole world at a normal demand level," cautioned Severine Omnes-Maisons, an analyst at Strategie Grains.
In the interim, Vincenzo Martinelli, president of the durum section of the Italian millers association Italmopa, is anxiously awaiting news of the Canadian harvest.
"Without Canada, prices will only go up," he warned.
Follow Daryo's official Instagram and Threads pages to keep up to date on world news.
Comments (0)