Raw materials

Soft wheat in crisis: imports will exceed 65% of requirements

Mainly used as flour for bread, cakes and biscuits, it had a -8% harvest due to the adverse weather, which will result in a doubling of arrivals from Canada and the USA

16 September 2024

3' min read

Less wheat and less good. Incessant rainfall in the North West close to threshing time has mown down not only yields but also the quality of the 2024 soft wheat harvest. Thus, after the collapse in durum wheat production compromised by the drought in the South and reaching record lows this year, estimates for the soft wheat harvest, initially expected to be in line with last year's with the same investments, are also turning negative.

According to Italmopa, the association representing the national milling industry, the actual production of soft wheat fell by 8% to 2.85 million tonnes, mainly due to the reduction in yields. Imports, structurally around 65% of requirements, will therefore exceed two-thirds of consumption, with the share of Italian production downgraded to feed use.

The new harvest, confirms the president of Italmopa, Andrea Valente, 'presents some problems in terms of quality compared to the needs of the milling industry, due above all to the unfavourable climate close to the harvest. National production is again expected to fall below three million tonnes compared to a domestic demand, considering all uses, of more than 8 million tonnes, of which 6.5 are destined for mills. Moreover,' he adds, 'a significant part of the harvest, due to its qualitative and sometimes sanitary characteristics, will unfortunately not be able to be processed by the milling industry but will necessarily have to be downgraded and destined for livestock or other uses.

The balance was particularly heavy, Valente emphasises, in the north-western regions, Piedmont and Lombardy, 'due to the continuous rain in the months preceding the harvest. Only a few production areas in Emilia Romagna and the Centre recorded appreciable results in a national context, however, that was strongly negative and worrying'.

Imports, which already historically account for 65 per cent of the national demand and generally come mainly from EU countries, are therefore inevitably destined to increase further. The geography of imports is also destined to change, 'with French production down from 35 to 25 million tonnes and with a lower bread-making quality than usual,' explains Valente, 'there will be a doubling of imports from North America, with strength grains from Canada and the United States needed to compensate for the poor protein quality of European production,' while Italy does not import Russian wheat, 'also due to a problem of EU duties that do not apply only to grains with more than 15% protein. What worries us,' Valente concludes, 'is the large percentage of fodder grains that determine lower production yields of up to 5% for the industry'.

Most of the flour processed by the milling industry is destined for baking and the production of bread substitutes (57%), the production of biscuits, bakery and pastry products (20%), the production of pizza (10%), exports (7%), domestic uses (4%) and the production of pasta (2%).

At the global level, meanwhile, the FAO this week revised its production estimates upwards to 791.4 million tonnes, two million tonnes lower than consumption (despite the downward correction to 793.3 million tonnes), with end-of-campaign stocks falling to 314.5 million tonnes. Prices were also down, affected by the particularly competitive prices of supplies from the Black Sea and larger than expected harvests in major exporting countries such as Argentina and the United States. Among the world's largest importers, in addition to China, is Egypt, which in order to secure supplies in August launched the largest tender in its history with the aim of procuring, at the best price, a quantity almost twenty times its usual size. A record auction of 3.8 million tonnes for supplies spread over six to seven months (from October 2024 to April next year), motivated by concerns about food security in the country, which relies on foreign supplies of wheat to produce subsidised bread for tens of millions of consumers, but also by the opportunity to find foreign grains at cheaper prices, with current values of around USD 200 per tonne close to their lowest for four years.