Price shock: why the price of pasta goes up

Price shock: why the price of pasta goes up

The cost of everyday items is ticking up, with a recent estimate from Eurostat proposes that consumer prices rise here by 8.2% during the year to the end of May.

This leads to larger purchase bills, where Kantar recently estimated that the average household’s food bill will be € 330 higher this year.

But not all price increases are the same, and a myriad of factors affect different products in different ways.

To help you understand what is happening, we have taken a closer look at a selection of everyday foods.

Everyone has seen significant price increases in recent weeks, but everyone has a different story to tell about the reasons for this.

In this paragraph we will look at pasta prices.

What happens to pasta?

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Adam Maguire discusses the rising price of pasta RTÉ Radio 1’s Today with Claire Byrne

Although pasta may have been something of an unusual item in previous generations’ cupboards, it is fair to say that it is now a staple in an Irish grocery store.

According to the Central Statistics Office, Ireland imported an average of 48,500,000 kg of the goods each year between 2019 and 2021. It is enough for each person in the country to eat more than 9 kg per year (but in reality not all of what was imported) would have been consumed).

The figure is also about 73% higher than what was imported into the country in 2011.

And the pandemic actually made us even bigger fans of pasta than before. Like people in many other countries, we tried to store storage-stable foods in case we could not get to the stores, and pasta is perfect if you are looking for that.

As a result, our pasta imports were more than 20% higher in 2020 than they were in 2019 – and it increased by more than 46% compared to 2018, a remarkable increase in just two years.

But we now have to pay much more to top up.

According to the latest data from the CSO, the price of pasta products rose by 11.8% during the year to April. This is in line with figures from the Irish Farmers Journal, which say that spaghetti prices went from 1 euro to 1.10 euros – an increase of 10%.

It is clearly a significant increase in a short time – but it is not as bad as one would have feared or predicted.

At the end of last year, for example, some analysts said that prices could go up by about 50%.

But what seems to have happened is that the companies along the chain – whether it is the producers, the wholesalers or the retailers themselves, have swallowed a small part of the increase – so the consumer has become somewhat isolated from the full impact.

But these companies say they have absorbed about as much as they can, and with expectations that prices will continue to rise, consumers may see further cost increases in the near future.

What has happened?

The pasta is made from durum wheat. It does not grow here, so we depend on other countries for our delivery.

As for the pasta itself, we would have received a considerable amount of our stock from the UK before Brexit, with Italy a close second – but now Italy is our single largest source.

Durum wheat grows in Italy – and they tend to produce enough to meet their own needs. Manufacturers there can then make dried pasta and sell it to people like Ireland, or sell the flour itself so that it can be made fresh in this country.

And durum wheat is the main reason why the price of pasta is rising – because there is an international shortage right now.

This is because Canada – which is actually the largest supplier of durum wheat in the world – has been hit by major weather problems that have severely damaged production.

Areas of Canada and the United States experienced temperatures of 49.6 degrees Celsius, along with fires and droughts – which is right on the doorstep of climate change, meaning that this type of thing can be expected to become more common in the coming years.

But it has already had a big impact. Some regions saw production fall by almost half as a result – and Canada’s wheat production as a whole fell by more than a third last year compared to 2020 levels.

This had an immediate effect on the price of durum wheat – which of course affected the price of the products made from wheat, namely pasta.

So one can reasonably draw a straight line between climate change and the rising price of pasta.

Given that such as Italy also produces durum wheat, you can normally expect it to take hold in Canada. But of course the effects of climate change are felt there as well – albeit in a different way.

Italian producers faced their own drought in October 2020 and it was followed by two months of heavy rain in November and December, which delayed the planting season.

Some other unfavorable weather – such as spring frost and a drier summer last year, also affected volumes.

So while Italian producers are usually quite self-sufficient, they had to rely more on international production last year – and because the global supply was affected, it meant that they also had to pay more.

What other factors affect?

Although climate change has had a direct impact on the price of pasta, it is important to see the whole context of this – and none of these things are happening in isolation.

The war in Ukraine has pushed up prices – as Ukraine and Russia are both suppliers of durum wheat as well.

At the same time, transport costs are rising, as is the cost of packaging – which must be included in prices.

And the Covid-19 pandemic has also had an impact.

Data from Nielsen in the early stages of the pandemic recorded an almost 200% increase in pasta sales compared to 2019. Kantar also said that sales of dry pasta increased by 55% in the UK during the first days of the Covid pandemic.

Because customers around the world stored goods such as pasta, this led to producers going too far to try to meet demand.

Normally there would be a surplus of wheat in reserve by the producers every year, but by 2020 they used pretty much all of this and retailers sold almost all of their stocks as well.

So the backstop of dried pasta and durum wheat normally found in the system was consumed.

This meant that when the supply of new wheat fell sharply in 2021, there was nothing left to fall back on.

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