HomeIdeaDurum wheat, reports of 'scams' ignored by Coldiretti and Filiera Italia

Durum wheat, reports of 'scams' ignored by Coldiretti and Filiera Italia

The farmers' protest is bringing to light a series of anomalies in the Italian system, including reports of 'scams' on durum wheat prices on the Bologna commodity exchange which were reported - and ignored - by Coldiretti and his Filiera Italia foundation . #CleanSpades.

1) Wheat, production in and around the EU

The total production of wheat and spelled in the European Union reached 133,491 million tonnes in 2023. The ranking of the top producing countries sees:

– France in first place, with 35,9 million tonnes

– Germany, 21,6 million tonnes

– Poland, 12,9 million tonnes

– Romania, 10,2 million tonnes

- Italy, 6,9 million tonnes

– Bulgaria, 6,8 million tonnes. (1)

At the borders of the EU , wheat production expected for the 2023/2024 season instead sees:

– Russia in first place, with around 92 million tonnes (2)

– Ukraine, with 22,5 million t and extremely low average prices (US$ 102/t), also due to the ATM (Autonomous Trade Measures) Regulation (EU) No 2023/1077 (3,4,5)

– Turkey with 21,8 million tonnes which include a record production of durum wheat (4,3 million tonnes). (6)

2) Wheat market in Italy, the Bologna commodity exchange

The Bologna commodity exchange represents the first point of reference for trading in the national cereal supply chain. (7) It includes over 600 operators in the cereal supply chain, in Italy and Europe, in the various areas of production, cooperative and private storage, commerce and trading, logistics, industrial processing (milling, pasta, oil, feed industries).

The main activities of the commodity exchange (AGER) concern:

– creation and updating of price lists

– drafting of standard contracts for the marketing of products

– arbitration chamber for the resolution of contractual disputes

– analysis laboratory, for the control of the qualitative characteristics and the valorisation of the supply chain products.

3) Price lists of the Bologna commodity exchange

The price lists of the Bologna Commodities Exchange are drawn up by the Price Committee, which is made up of all the entrepreneurial and professional representatives operating on the exchange and is appointed every year by the Council of the Bologna Chamber of Commerce.

Centrality of the Bologna Commodities Exchange cereal price list is evident in its use:

– in supply chain contracts, where its quotations are often used to determine commodity prices

– in the weekly surveys of the European Commission's DG Agri, as the only reference price list for Italy.

4) Durum wheat and other cereals, reports of 'scams' ignored by Coldiretti and Filiera Italia

The 'scams' on the durum wheat lists on the Bologna commodity exchange have been repeatedly denounced - by an Italian cereal farmer, between November 2021 and April 2022 - both to Coldiretti president Ettore Prandini and to Pier Carlo Tondo of Coldiretti's 'Filiera Italia' foundation, as well as expert on the subject. (8) Without ever receiving feedback.

Durum wheat was sold at €300/t arrival Marghera, i.e. €280/285/t departing Bologna, between October and November 2019, while the price list on the Bologna commodities exchange was at €255/260/t departure Emilia Romagna area, between October and November. 'So the farmers were defrauded as the price list did not follow the real market prices but lower' of 20-25€/t.

The complaints - also referring to previous and subsequent periods (from September 2019 to March 2022), as well as to soft wheat, national corn and minor cereals - were circumstantiated with evidence of the differences, always downward, between the price lists and the real sale prices. To the detriment of farmers in Emilia-Romagna and Marche, above all.

5) The unheard appeal

'Reluctantlybut for the protection of all Italian farmers, I have to report what is happening on the Bologna Commodity Exchange, regarding the quotations of agricultural products and secondary products resulting from the processing of the milling industries, in relation to the determination of weekly prices'.

The author of the complaint attributes this phenomenon to the opacity of price determination mechanisms, with regard to both raw materials (common wheat, durum wheat, sorghum, barley, etc.), and secondary materials such as soft wheat bran and durum wheat bran.

6) Pricing mechanisms

'In the past negotiations for the sale and purchase of agricultural products and secondary products began around 9 a.m. and ended around 17 p.m. During this time, sellers and buyers would exchange views through brokers on prices that they could consider remunerative for sellers and of interest to buyers, with negotiations that at the end of the evening would determine the real market price of the products. And at around 17 p.m., the Commission made up of brokers, traders, farmers, industrialists, appointed and controlled by the Bologna Chamber of Commerce, would define the price list.

Today aall this type of bargaining no longer exists as the number of traders has greatly diminished, the people who attend the market are mainly managers, purchasing or sales managers, only the brokers have remained the same and have managed to create a piloted and very dangerous situation with reference to the quotations and pricing of agricultural products. (…)

Since (...) these negotiations take place electronically or by telephone, they do not convey any price transparency and give rise to price manipulation. I would like to point out that the prices recorded on the Bologna Commodity Exchange, on this Thursday, are a reference and are valid for half of Italy and will determine the actual remuneration to the farmer'..

7) Agiotage?

The reported facts – if actually ascertained by the Public Prosecutor's Office at the Court of Bologna – could possibly constitute the offence of market rigging, which punishesanyone who, in order to disturb the internal market of securities or goods, publishes or otherwise disseminates false, exaggerated or biased information or uses other devices aimed at causing an increase or decrease in the price of goods'. (9)

The Public Prosecutor's Office at the Court of Rome could in turn conduct investigations into the market disruptions carried out - and documented by GIFT (Great Italian Food Trade), in the #VanghePulite investigation (10) – within the framework of the CUN (National Single Commission) Pigs. Where once again farmers, in this case pig farmers, are victims of speculation.

8) Coldiretti, Filiera Italia. Which representation?

'I think the pricesof durum wheat reported by the Bologna Stock Exchange, have been underpriced on several occasions, creating a large profit for traders and considerable advantages for the pasta industry to the detriment of farmers, so I would ask you to carry out checks on this'.

Coldiretti and Filiera Italia have not responded at all to the complaints of 'fraud', i.e. agiotage, on durum wheat and other cereals.. Neither have they done anything to protect pig farmers, nor have they ever considered using incorruptible technology (blockchain) to ensure the transparency of electronic commodity exchanges. (11)

Filiera Italia on the other hand - under the presidency of the MEP Paolo De Castro - brings together the agro-industrial oligarchies (i.e. Bonifiche Ferraresi, Federconsorzi alias CAI SpA), the large buyers of durum wheat (eg De Cecco, Casillo, Cereal Docks), the large ham factories (eg Beretta, Rigamonti) and many others.

What representation for Italian farmers and breeders?

#CleanSpades

Dario Dongo

Footnotes

(1) Wheat and spelled by area, production and humidity. Eurostat. Latest update 9.2.24 http://tinyurl.com/28dcfshv

(2) Sam Baff. French wheat exports suffer from Russian competition in 2023. Fast markets. 11.1.24 http://tinyurl.com/5dmux9zw

(3) Ukraine: Overview of MY 2023/24 Wheat Harvest. USDA, Commodity Intelligence Report. 12.10.23 http://tinyurl.com/2s98fney

(4) Pavel Polityuk. Ukraine's grain sector losses could top $3.2 bln in 2023 due to war. Reuters. 19.10.23 http://tinyurl.com/hz62x8xh

(5) See paragraphs 4,5,6 of the previous article by Dario Dongo. European farmers, the Ukrainian question in Brussels. GIFT (Great Italian Food Trade). 16.1.24

(6) Turkey achieves historic 4.3 million tonnes of durum wheat. Miller magazine. 13.12.23 http://tinyurl.com/58fpb2px

(7) The Bologna Commodity Exchange, established with Presidential Decree 16 July 1951, is managed by AGER (Associazione Granaria Emiliana Romagnola) as management concessionaire (Bologna Chamber of Commerce Resolution no. 374 of 21.11.1960 and Presidential Decree 18.6.1962. XNUMX)

(8) Pier Paolo Tondo. Unfair practices: in Italy there was no contrast. The Agricultural Informant 4/2020. http://tinyurl.com/2r9phyd3

(9) Criminal Code, article 501. Fraudulent raising and lowering of prices on the public market or on stock exchanges

(10) Dario Dongo. CUN pork and PDO hams. Market disruption? GIFT (Great Italian Food Trade). 20.6.22

(11) Dario Dongo. An electronic commodity exchange to promote transparency and fairness in the food supply chain. GIFT (Great Italian Food Trade). 8.3.21

+ posts

Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.

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