Pandemic lockdowns have altered food consumption patterns around the world. Stockpiling of staples and more home-cooking have given a big boost to one wheat-based product in particular — pasta — and to the durum wheat needed to make Italy’s extruded contribution to global cuisine.
Leading durum and pasta exporting countries have experienced surging demand. Italy, which exports 60% of its pasta output, saw international sales increase by 30% during the first half of 2020, as reported by the Economist in November 2020, with multinational industry giant Barilla at the forefront. Italy grows 4 million tonnes of durum and imports another 2 million tonnes.
A Stratégie Grains (SG) report, published in early 2021 by Tallage, a French consultancy, found that European Union human consumption demand for durum wheat had increased from 8.2 million tonnes in 2018-19 to 8.7 million tonnes to 2019-20 as a result of “the period of lockdown in spring 2020 that was implemented in response to the COVID-19 pandemic.”
Even prior to 2020, Turkey’s macaroni and spaghetti makers had been benefiting from burgeoning overseas demand. International shipments by Turkey’s 26 pasta makers in the most recent year totaled 1.4 million tonnes, about two-thirds of the country’s total output. That is nearly a five-fold increase from the 300,000 tonnes sold to other countries in 2010, according to data compiled by the Pasta Producers and Industrialists Association of Turkey.
Turkey’s harvest of 2.3 million tonnes of durum wheat in the 2019-20 crop year was just enough to satisfy domestic pasta and bulgur demand. Turkey ranks only in the medium range of pasta intake at 7.5 kilograms per capita annually, less than a third of the world-topping 23 kilograms eaten by the average Italian.
The government permits Turkey’s pasta producers, all of whom are semolina millers as well, to import duty free the durum they need to meet pasta export demand. In the last year, these imports grew to about 1.5 million tonnes (per SG) purchased mostly by the cluster of export pasta companies centered around Gaziantep in the southeast, the largest of which is OBA Makarna.
By buying top quality amber durum from Canada in particular, as well as smaller quantities of less expensive durum from Mexico, Kazakhstan, Russia and Greece, Turkish pasta makers have established a strong foothold in dozens of country markets. Much of the business is private label, meaning the pasta is packaged under the brand of the importer.
“During the pandemic process, we’ve sold our goods to countries that we’ve never sold to before,” said Veysel Miskin, import-export director at OBA Makarna. “Most of them are in the EU.”
But for the Turkish pasta companies, most export growth has been to rapidly urbanizing sub-Saharan African countries, which are now taking 55% of the country’s international sales. To assure price competitiveness, Turkey’s government allows pasta going to these countries to be made from 30% common wheat flour, while still requiring all pasta for domestic use and other export markets to be made from 100% durum wheat.
Turkey also has 100 mostly small companies that produce over 1 million tonnes of bulgur that is made from quality durum. Turks are the largest consumers of bulgur but still export around 200,000 tonnes to neighboring countries, especially the northern Kurdish zone of Syria.
North Africa’s supply and demand picture
While durum wheat and pasta are part of a single value chain in most Western countries, elsewhere not all durum goes for pasta production, just as not all pasta is made only from durum wheat.
The first rule is especially the case in the Maghreb countries of North Africa — Morocco, Algeria and Tunisia — that account for a significant share of durum’s production and trade.
In Morocco, 40 industrial semolina millers have consistently bought from abroad around 1 million tonnes of durum wheat per year, primarily to grind semolina that is purchased by households and restaurants to make couscous, a dietary staple of the region. Canadian Western Amber Durum (CWAD) grades one and two make up most of the overseas supply, since Moroccan consumers will settle only for top quality couscous. The average Moroccan eats 5 kilograms of pasta per year, meaning around 20% of imported durum goes for pasta.
In 2020, Morocco produced 790,000 tonnes of durum wheat amounting to 31% of the total harvest, which was reduced that year by drought. However, large commercial semolina millers do not use domestic durum in part because it is afflicted by a fungus, known as “mitadinage,” that gives it a light color in contrast to the golden yellow hue of North American durum. Small village mills grind the locally harvested crop for homemade couscous and semolina for traditional bread.
Neighboring Algeria is the third most important durum producer after the European Union and Canada. Annual harvests of 3.4 million tonnes in 2019-20 and an estimated 3.2 million tonnes in 2020-21 make up 85% of total wheat output. Thanks to heavy state investment in irrigated wheat farming and to good precipitation, in three of the last five years Algeria has set records for durum and overall wheat production.
In addition to its position as the world’s No. 3 wheat importer, Algeria has ranked among the top durum purchasers in recent years, hitting a peak of 1.4 million tonnes in 2018-19 before halving its intake to 700,000 tonnes the following year.
The country’s state-owned monopoly wheat importer OAIC announced a halt to subsidies of durum imports at the end of 2020, but the decrees were put on hold after contributing to a pasta shortage and price increase. The three major industrial pasta and couscous producers — SIM Group, Benamor Group and Sarafina — who share about three quarters of the market, already had started buying more of their durum directly from the grain trade.
At 12 kilograms per capita, Algeria’s pasta consumption levels are much higher than in Morocco. Thus, a larger share of imported durum goes for pasta. Algeria mainly purchases CWAD as well in order to get at least 75% hard vitreous kernels needed for quality semolina, although it also imports part of its need from Mexico, France and elsewhere to lower costs.
In Algeria there are many dozen small industrial millers who grind domestic durum into a fine semolina used in baking traditional bread. OAIC buys up the crop at a minimum guaranteed price and allocates it under a monthly quota system to these mills who then sell semolina at fixed government prices. The whole system guarantees the profitability of inefficient mills even when their allocation is only enough to operate at a fraction of their capacity.
In Tunisia about half of the 23 operating milling companies produce semolina.
The domestic crop, averaging 1.1 million tonnes the last five years, is 85% durum. The Tunisian government pays a minimum farm-gate price equivalent to $288 per tonne (820 Tunisian dinars) for durum wheat and $207 per tonne (590 Tunisian dinars) for common wheat.
About one-third of the annual average of 1.8 million tonnes of wheat purchased abroad by the state monopoly buyer Office des Céréales is durum. Low quality specifications result in most tenders being won by traders in southern Europe — especially in Italy — who have the ability to blend different origins, including North American.
The Office des Céréales allocates the durum to the semolina millers based on their capacity, in the same way it distributes bread wheat to all milling companies. In Tunisia, by law pasta and couscous must be made from durum wheat. At 17 kilograms per capita, Tunisians are the top pasta eaters in the Maghreb.
The Tunisian Millers Association reports that 80% of total semolina production from imported and domestic durum is sold at retail and to small businesses for baking traditional bread, mostly commonly eaten at breakfast as well as for homemade and cottage industry couscous. The remaining 20% is processed industrially into pasta (12%) and couscous (8%).
EU plays major role
Collectively the 28 nations of the European Union (EU-28) play the biggest role in global durum production and consumption. Stratégie Grains estimates EU-28’s output in 2020-21 to be 7.3 million tonnes, or 21% of the world total of 34.2 million tonnes. In 2019-20, EU-28 imports from third countries were 2.4 million tonnes, up from 1.3 million tonnes the prior year.
Italy alone accounts for half of the EU’s durum crop and for nearly 90% of its imports. World-leading per-person consumption as well as international demand for the wide assortment of Italian-made hard, dry noodles sustain durum imports.
Despite a growing appetite for the crop’s end products, the EU’s total durum harvest has declined every year since 2016-17 when the crop came in at 9.8 million tonnes. Low yields and prices have led the continent’s wheat growers to reduce the area planted over the last five years from 2.9 million hectares to 2.3 million hectares. High levels of mycotoxins in some regions of France have resulted in a larger part of the durum crop being downgraded to feed use, according to an SG report.
A potential countertrend to the above is the “development of an Italian sector for 100% Italian pasta,” SG durum analyst Séverine Omnès-Maisons told World Grain.
“Major brands of pasta wish to meet consumer demand by assuring a national supply, which implies an increase in the area devoted to durum wheat,” she said.
If this takes hold, Italy’s importation of North American durum could eventually decrease, the analyst concluded.
For now, however, declining European production has only strengthened Canada’s position as the dominant supplier to the global durum trade. The country’s exports have surged from 4.7 million tonnes in 2018-19 to a forecast 5.5 million tonnes in 2020-21, constituting 68% of the international supply, per SG. As much as 90% of Canada’s durum crop is sold to other countries.
The United States and Mexico as the second and third leading origins contributed 600,000 tonnes and 500,000 tonnes, respectively, to the trade, making global buyers 81% dependent on North America.
The major part of Mexico’s wheat production is durum since, thanks to a deep root structure, the hardy variety offers better yields than common wheat in areas of low precipitation. Much of Mexico’s durum is exported even as the country imports 5 million tonnes of wheat from north of the Rio Grande for bread and cake flour.
The International Pasta Organization reports 2019 worldwide pasta consumption at 16.5 million tonnes, up from 7 million tonnes in 1999. That would require close to 22 million tonnes of the total 33 million tonnes of durum harvested that year. However, in lesser developed countries, particularly those of sub-Saharan Africa, much pasta is made using 100% bread flour, reducing raw material costs and avoiding capital investment in specialized semolina milling equipment. Newly formulated enzyme additives help make quality acceptable by reducing the tendency of pasta to dissolve while boiling. But such non-durum pasta lacks the al dente firmness and golden yellow visual appeal that connoisseurs of the starchy food insist on.
As for other major trends, Omnès-Maisons of Tallage believes that cheap pasta exports from Turkey will continue to grow, while Algeria’s replacement of half its peak level of durum imports by local production is likely to be sustained.
Post-pandemic, producers and traders of durum wheat as well as semolina millers and food companies like Barilla and OBA Makarna no doubt will have to navigate new, unexpected twists and turns in global pasta demand and durum supply. But they are accustomed to that.
David McKee’s grain industry consultancy, Key International LCC, provides market research, feasibility analysis, technical studies and project guidance to companies and organizations. He may be reached at email@example.com.