The mysterious and sudden invasion of Russian wheat into Italy has been going on for about a year now: durum wheat in particular, which is transformed into pasta and then reaches the tables of Italian families. Since July 2023, the inflow of such foodstuffs from Russia has suddenly increased more than tenfold, with an increase of 1,164% in the last year, significantly surpassing even Canada, traditionally the main foreign supplier to Italian pasta producers. Inflows have accelerated further in the last six months. Moreover, Italy remains the only country in the EU to have achieved such an increase, while other durum wheat-consuming economies such as Spain, Belgium or Greece do not have this product at all.

Russian Food Products Are Not Subject to Sanctions

Unlike oil, most steel products or diamonds, Russian agricultural products have never been subject to EU sanctions. From the outset, the purpose of the exemption has been to avoid an increase in the international price of food raw materials, which would mainly affect the poorest populations in developing countries. Thus, the purchases by Italian operators were themselves legal, even though most Russian durum wheat is usually exported to lower and middle-income economies.

Triangulation with Turkey and Kazakhstan

However, much of this ambiguity has to do with trade routes. In fact, they do not always appear to be direct: the impression is given that products from the Russian Federation also arrive via triangulation, thus obfuscating traces of their true origin. In 2023, Italy imported 410,000 tons of wheat directly from Russia, whereas in previous years and even before the war, imports were almost nil. However, at precisely the same time, there was also a surge in imports from Turkey, reaching 410,000 tons again by 2023, a country that had been almost completely absent from the Italian market in previous years. In fact, by the second half of 2023, Russia and Turkey will supply almost twice as much as Canada, which has been Italy's largest foreign supplier for years. Equally perverse is the increase in the volume of shipments from Kazakhstan on the Italian market, which will reach 250,000 tons by 2023, whereas this was irrelevant in previous years: in this case, there is also the risk of triangulation with Russia to cover the origin. This product is difficult to exclude.

Risks for Italy

All this naturally leaves this country with a difficult choice. For it is undeniable that Russian production is very accessible: it is cheap compared to production in Italy or Canada, and processors are able to be competitive and reduce prices for consumers after a season of food inflation that hit less affluent families hard. But Russian wheat, either directly or clandestinely through triangulation with Turkey or Kazakhstan, entered Italy in large quantities, ultimately financing Vladimir Putin's war economy.

Speculation

Then there is a second problem, because imports of Italian pasta wheat account for less than a third of total demand. The Italian producers who secured the remaining 70% market share now find themselves displaced and facing much lower cost competition, forcing them to lower their margins to stay in the market. The current wholesale price of durum wheat is 385 euros a tonne, more than 30% higher than it was before Putin's gas rationing led to a spike in fertilizer and crop prices in mid-2021. But wholesale prices have fallen 7.6 percent since last July, precisely because of the presence of below-cost wheat from the East on the Italian market, said Nicola Musa, head of supply chain contracts at Consorzi d'Italia. "We believe that these sudden arrivals of Russian and Turkish wheat could be an act of speculation, orchestrated in order to devalue Italian products. and an elaborate speculation." But the head of Consorzi d'Italia added: "We expect the price of Italian wheat origin to rise again in the coming months, as historically Italian wheat has always had higher quality standards."