ITALIAN CRISIS!

This is in from ANSA:

Pasta 30% up but wheat 25% down

‘No alibi’ for not lowering pasta prices, farmers say

(ANSA) – Rome, August 20 – This year’s extraordinary rise in pasta prices has been even higher than previously thought, the Italian Treasury said Wednesday.

But the price of wheat, which is used to make pasta, has dropped almost as sharply, a top farming association said. Pasta prices have risen some 30% in the first half of the year, the ministry said, touching up the 25% figure issued by national statistics institute ISTAT last month.

The only rise steeper than pasta’s was diesel, driven by rocketing oil prices.

Diesel fuel showed a 31.9% rise in the first six months of 2008, compared to pasta’s 30.4% hike.

Pasta was well ahead of petrol, which rose 24.5%. Bread was up 13.2% and milk 11.8%.

But the price of durum wheat has fallen some 25% in the first half of 2008, farming association Confagricoltura said.

Another farming association, Coldiretti, said the rise in price from farm to consumer was a whopping 369%.

There was ”no alibi” for not dropping the prices of pasta and other staples like bread and milk, which also showed huge increases, it said.

Coldiretti blamed ”distortions and too many steps from the farm to the table” for the massive discrepancies.

Milk was 241% dearer in shops than it was at the farm, while bread was an astonishing 1,325% dearer.

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14 Responses to ITALIAN CRISIS!

  1. Trenta %!! Un po’ caro, no!? Such bad news! Just as I’m planning a trip to to Italy in October! I guess it’s a good thing I don’t like diesel sauce on my farfalle!

  2. Rollo says:

    I wonder what has been the ”traditional” reaction of the Church in cases of severe economic recession and inflation ?

    What we are heading for if this continues is an ”economy of peasants”, almost medieval. No more shopping malls, no more cheap credit, no more ”life is cheap” rhetoric, etc.

    In any case, we should thank the Lord and suspend all sunday shopping. This will clearly help the economy, which distinctly suffers because of a de-ritualized, un-liturgical social atrmosphere.

  3. Al says:

    Pasta up 30% in Italia!!!!!!!!!!
    Isn’t that a sign of the Apocalypse?

  4. Tzard says:

    Perhaps it’s because of the Spaghetti weevil….

    http://tiny.cc/1US19

  5. mcitl says:

    Barilla and others make their pasta from desert durum wheat grown in the USA. The Euro/dollar exchange would tend to keep prices down, but the transportation costs might be canceling out that effect.

  6. Tim Ferguson says:

    Color me somewhat shocked that Italians don’t make their pasta at home.

  7. Phil (NL) says:

    Without further information, my reaction would simply be a big yawn.

    There are several quite plausible explanations for this to happen, without having to resort to foul play or abnormal behavior on anyone’s side.

    Let’s start with the fact that maybe wheat is dropping in price now, but compared to say a year or two years ago, it’s probably still up by a lot. Mostly due to bad harvests and Chinese demand. Possible explanation number 1: it takes time for prices to adjust, especially if there are long-term contracts in place for either the wheat or the final product. Lower input prices while the price for the output rises isn’t all that unusual – as is the opposite, input price hikes that can’t be passed on to clients (yet).

    Secondly, one of the marvels of modern science and economics is that foodstuff are actually very cheap to produce. So possible explanation number 2: transport and processing costs have risen, and these costs are likely to be a substantial part of the cost of the final product. Note especially the similar hike in diesel costs.

    Last but not least: european agriculture gets subsidized. Possible explanation number 3: the farmers are competing so ferociously they sell at prices they couldn’t sell at without the handouts. The subsidies keep them in business, so that situation perpetuates itself. Ofcourse, the companies buying from them don’t have subsidies to keep them in business or any incentive to sell for less than they can get away with, so they pocket some of the cash. Perfectly normal, and if this is the case, it won’t last – more pasta factories will emerge to get a slice of that cake, thereby reducing it to normal levels.

    Now I don’t know which of these possible explanations is the right one here, if any. But from the simple price movements, you can say precisely nothing. The farming association is probaly just playing a semi-political game, in follow up to the ‘pasta-strike’ we saw earlier this year.

  8. Catholic Agrarian says:

    Worldwide demand for oil surpassed production this year, so expensive pasta’s going to be the least of our concerns for 2009. Make sure you’re fully stocked with blessed candles!

  9. I was in Rome last year when there was a “pasta protest” due to the rising pasta prices. Supposedly everyone was to stop eating pasta for a day. Amazingly the country didn’t implode, but I guess it didn’t work well either. LOL.

    With both pizza and pasta prices skyrocketing in Italy, my October trip to Rome is going to be costly. :( Guess I’ll have to stick to lenticchi e cingale in Norcia. :)

  10. Edmund Dean says:

    @ Agrarian – my first-hand consumption of oil is literally nil, whereas a eat pasta about once a week, so I can’t say I’m in the same boat. Of course, the more candles, the better…need I add that candles and pasta go very well together?

  11. Robert Medonis says:

    If the Italians would start eating like the Lithuanians then there would be no problem:
    potatoes and pork products. Kugelis and cepelinis are much better for you than pasta.

  12. Martin says:

    Bread prices up 1,300%?

    A $1 loaf of bread is $1,300?

  13. Deusdonat says:

    Martin – in case you weren’t joking, in Europe we use the comma , where in the US we use a period . for the placeholder between digits. So one thousand one hundred and six is written 1.106 in Europe and 1 point 5 percent is written 1,5%