High alert in Italy: pasta is worth a pasta (and it's not the wheat's fault)

The Italian government is on high alert for one of the most idiosyncratic threats in the country's history: soaring pasta prices.

In recent days, multiple consumer rights organizations have reported that from June 2021 to today, in just under two years, the price of a kilo of pasta has grown by 37%, with a year-on-year increase of 17.5% registered. in March, well above the inflation line in Italy, which that month stood at 7.8%. The result is that the average Italian spends, on average, 25 euros more per year on the star product in their shopping cart, a figure that, although low in general terms, is explosive for public opinion in the country..

Faced with such a sensitive issue, the Executive has not stood idly by. The Italian Government held, for the first time this Wednesday, an emergency meeting at the Piacentini Palace with the Rapid Alert Commission, a body created in March as part of a decree-law of the Executive for the transparency of fuel prices and other products. This control body is made up of representatives of the central, regional and local administration, as well as trade and consumer associations and other competent authorities..

The rapid alert Commission, chaired by the Supervisor of #prices, Benedetto Mineo, met for the first time to monitor and analyze the dynamics of the cost of #pasta pic.twitter.com/XMA7YRkRsO

— MIMIT (@mimit_gov) May 11, 2023

Hours before the start of the meeting of these miércoles, the Minister of Enterprise and Made in Italy, Adolfo Urso, predicted that the end of high prices is on the horizon. “I can say that we already have the first responses and that they are positive, because since we convened the commission, many companies have clarified that this increase was and is temporary,” said the politician from the far-right Fratelli d'Italia formation.. “The increase was due to the increase in raw materials and energy last year, since the pasta on the market was produced in recent months. So prices will be lower again in the next few weeks,” Urso predicted..

But from the National Union of Consumers, one of the most important consumer defense organizations in Italy, they consider this annual price increase as something “unacceptable and intolerable”.. “The price of pasta should drop immediately, given that the price of durum wheat, with which pasta is made, has been falling on international markets for a year,” said Massimiliano Dona, president of the National Consumers Union, in statements to The Confidential. Codacons, another of these associations, also expressed rejection of Urso's statements: “We are very skeptical about the announced reduction in pasta prices,” he told AgenPress.

Italy is especially demanding with the production of its pasta due to a decree promulgated in 1967 and known as the “purity law”.. This legislation establishes that all dry pasta (such as spaghetti or macaroni) sold in the country must be made exclusively from durum wheat, a thick strain and more difficult to work than traditional bread wheat.. Less than 10% of world wheat production corresponds to this category.

The increase in pasta prices is especially hurtful for the Italian agricultural sector because, in parallel to the 17.5% increase over the last year, there has been a 30% drop in durum wheat prices, which are currently at a level similar to that prior to the large-scale Russian invasion of Ukraine. Currently, this raw material is paid in Italy at about 36 cents per kilo, a value that, denounced by farmers, does not cover production costs. Italian pasta producers, for their part, cite high energy costs and supply chain problems as to blame for their recent price hikes..

Codacons has filed a complaint with the Competition Authority and the Department of the central inspection for the protection of quality and the repression of fraud in agri-food products (ICQRF) to determine if the phenomenon in the pasta sector “could be the result of an agreement between the manufacturing companies to the detriment of the market and the final consumers, and if the conduct described contravenes the provisions of the law”.

There are reasons for suspicion. In 2009, 26 Italian pasta makers and an industrial group were fined €12.5 million after a price-fixing scheme was revealed.. The plot lasted from October 2006 to at least early March 2008, causing a 51.8% retail price increase..

From the Young Farmers Agrarian Association (Asaja) it is indicated that the fluctuating prices of durum wheat do not pose a great concern in Spain because it is a tiny part of our economy and consumption. “But in Italy, buf, that is a matter of State”, expresses one of its representatives to this newspaper. Italy produces 3.6 million tons of dry wheat pasta per year, which is equivalent to about 25% of global production.. About 200,000 Italian farms supply durum wheat to a supply chain that has 360 companies and about 7,500 employees, for a total value of about 5 billion euros, according to the Italian National Confederation of Direct Farmers (Coldiretti).. At the same time – and not surprisingly – Italians are the biggest pasta eaters in the world, with an average of 23 kilograms per person per year, five times the global average consumption..

Mettiamo un tetto al prezzo della pasta? pic.twitter.com/H3IkhTmzhH

— Giorgio Spaziani Testa (@gspazianitesta) May 6, 2023

The increase in prices varies considerably from one region of the Bel Paese to another, which adds fuel to the fire of accusations of speculation. The largest floods, according to a file prepared by Assoutenti, another consumer defense organization, were registered in several provinces of Tuscany. The record belongs to Siena, where the kilo of pasta went from an average of 1.37 euros per kilo in March 2022 to 2.17 euros in the same month of 2023, an increase of 58.4%. “Today, the retail prices of pasta suffer surcharges from the field to the table of up to +578%,” denounces the association in a statement.

Reversing these changes will not be easy. “As usually happens in case of strong price tensions, the latter increase very quickly, but they almost never go back,” lamented Federconsumatori, another Italian organization —as can be seen, there are no shortages in the country— for consumer protection. “We have asked that immediate action be taken to control prices and not wait for companies in the sector, which may lower prices in September-October (that is, when, according to companies, inventories purchased at the lowest prices begin to take effect). The times are too long for us and unsustainable for the citizens!”, affirms the association in a statement to El Confidencial.

In Asaja, they consider that not even this price reduction is guaranteed. “They are trusting in a good harvest, since it is expected that there will be both in the northern and southern hemispheres and in these cases, normally, the price tends to stabilize,” an expert from the association told El Confidencial. However, remember that the critical raw material is often a small proportion of the final price of food products and that increases often depend on other factors that are difficult to resolve quickly.. “The cost of the paper sack that the wheat goes in has more than doubled. Right now you buy wine and it is more expensive than before despite the fact that the price of grapes has gone down. The problem is in the glass, cork, bottling, labor, transportation, distribution…”, he exemplifies.

Precisely, the general manager of La Molisana, the fifth largest pasta producer in Italy, referred to this problem this week from the stands of the Tuttofood fair, which ended yesterday in Milan. “The price of pasta will go down because the price of wheat has gone down, but the price of gasoline continues to triple and neither paper nor cellophane has gone down,” warned Giuseppe Ferro. In other words, one can expect with some certainty that Italian pasta will become cheaper in the coming months, ma non troppo.