Major durum customer takes go-slow approach
SASKATOON — Italian durum buyers are being cautious this year, according to an analyst.
They are concerned about potential pasta tariffs they could be facing in the United States, which is one of their top export markets.
The U.S. Commerce Department released a preliminary decision in September imposing a 92 per cent tariff on 13 Italian pasta producers.
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That tariff would be in addition to the 15 per cent tariff U.S. president Donald Trump’s administration has imposed on European exports in general, bringing the total to 107 per cent.
The final decision is due Jan. 2, although it could be extended by 60 days.
Why it Matters: Italy is a top buyer of Canadian durum.
The U.S. accounted for 12.9 per cent of Italy’s pasta export volumes and 15.8 per cent of export value in 2024, according to Arete, an Italian agri-food intelligence company.
“The U.S. market is certainly significant for the Italian pasta industry as a whole,” Arete analyst Annachiara Saguatti said in an email.
“But it can be even more crucial for some of the individual companies currently targeted by the investigation, which rely more heavily on the U.S. for their sales mix.”
She said the issue has created “caution and uncertainty” among pasta manufacturers. If the duty holds, manufacturers would be forced to either sharply raise their prices or stop exporting to the U.S. altogether.
“This uncertainty naturally leads to more conservative procurement strategies for durum wheat, meaning a more cautious approach rather than an already observable drop in buying volumes,” said Saguatti.
Italy was Canada’s third largest durum market in 2024-25 behind Algeria and Morocco, according to Canadian Grain Commission statistics.
The European country bought 838,200 tonnes of the crop during that marketing campaign.
Saguatti said there has been no public indication that there will be a significant revision to the preliminary ruling when the final ruling comes down in January.
“That said, both the Italian government and the European Commission are actively engaging with U.S. authorities, so some adjustment cannot be ruled out,” she said.
White House spokesperson Kush Desai recently told Fox News that the proposed duty is in response to Italian pasta makers repeatedly messing up a data request for a routine anti-dumping probe dating back to 1996.
Commerce employees reached out to the companies seven times before the preliminary ruling, according to the Fox story.
“Most did not respond, but the ones that did didn’t provide the proper data. Therefore, those companies received the worst possible anti-dumping tariff rate of 92 per cent,” stated the story.
The Fox story said White House and U.S. Department of Commerce officials stressed that the preliminary rate is not set in stone and that if the companies provide the required data, the tariff rate would fall to seven to 10 per cent.
Saguatti said Italy’s durum market is also being influenced by the possible implementation of a national law restricting purchases below government estimated production costs.
“Many buyers fear potential legal challenges if they purchase below cost, which has significantly slowed trading in recent months,” she said.
“Several operators argue that this issue is having a more immediate and concrete impact on market liquidity than the potential U.S. duties.”
Source: producer.com