Pasta Makers Worried About Price Hike Of Durum Wheat

Italian pasta makers are fearful of a substantial supply squeeze in the coming months after this summer's durum wheat price shock, as the market runs out of ways to offset a dire harvest in top exporter Canada, Gus Trompiz and Giancarlo Navach reported for Reuters.

Photo Insert: A Vegetarian pasta dish

Extreme heat and drought this year in the North American country, which usually accounts for about two-thirds of global durum trade, are expected to cut output there by about 3 million tons to nearly 50% below 2020 levels.

That has sent durum quotations to 13-year highs, stoking concerns about food inflation at a time when many economies are struggling to recover from COVID-19.

An index of food prices from the United Nations Food and Agriculture Organization (FAO) at a 10-year high, with the cost of bread also climbing as European wheat prices hit a 13-year peak this month.

With forecasts for Italy's domestic durum crop, which typically covers most of pasta makers' needs, also recently cut, the country's food producers are particularly exposed to turmoil in the wider market for the niche wheat variety.

Some Italian processors risk being caught short when the local crop runs out and may see production stoppages in the coming months, Strategie Grains analyst Severine Omnes-Maisons said.

"In terms of prices and scarcity of durum, the worst is perhaps still to come."

Canada's output wilted just as world durum stocks were already at a six-year low, partly due to at-home hoarding of pasta during pandemic lockdowns. Several crops have seen prices jump this year due to harvest setbacks and mounting supply chain costs, but tensions in durum have been particularly intense, with export prices almost doubling since June.

Italy's durum crop had been expected to surpass 2020 levels this year, but the European Commission in October cut its estimate to 3.7 million tons from 4.3 million, leaving pasta makers fretting about availability in the first half of 2022.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic