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World Pasta Market and Turkey

24 December 201320 min reading
The consumption of pasta in the world and thus the demand for pasta increases rapidly. Wheat’s being a food staple and properties of pasta such as having high nutritious value, being easily prepared, being sold for a cheap price and being stored for a long period are considered as the main reasons of the increase. The increase of pasta production, which was 9.3 million tons in 2001, to 10 million 446 thousand tons in 2003 and approximately 13.5 million tons in 2013 is the most important indicator of the demand increase in pasta throughout the world. Pasta is a quite nutritious food product that is obtained by the mixture of semolina of hard durum wheat and some enriching substances, shaping and drying and that has a huge demand from international trade. The demand for pasta, which is the second most important food product after bread among industrial products obtained from wheat in terms of its production amount and importance on nutrition, continues to increase over the years. The properties of pasta to be stored for a long period without deteriorating, consumed with different varieties and shapes, prepared fast and easily are considered to have a significant effect on this increase. However despite the increasing production and demand; some countries become exporters and others become importers due to the dependence of pasta production on durum wheat as the raw material and that hard durum wheat species are grown in certain areas of the world. WORLD PASTA PRODUCTION Today; it is estimated that pasta, which ranks second after bread in the usage of wheat after processed into human food, had firstly been used in China in 1700s B.C. and then brought to Italy, considered to be the origin of pasta by many, by Marco Polo in 1292. And it is seen that the pasta production that developed rapidly in Italy spread to the entire Europe within a short amount of time. Italians, who migrated to USA (1789), took pasta with them and thus USA met with pasta. The pasta production in Italy, which ranks first in today’s pasta production, was made in regions where climate conditions were appropriate. With the technological development, this dependence on climate conditions changed. After the World War II, pasta factories were begun to be founded especially in countries where Italians were living and thus pasta begun to be known by many foreign societies. The invention of automatic continuous pasta plants by Mario and Guisseppe Braibanti company turned pasta production into an industrial process in 1933. According to the data of International Pasta Organization (IPO); world pasta production, which was 12.7 million tons in 2010, has reached to approximately 13.5 million tons in 2013. In pasta, where production centers upon few countries, Italy ranks first in world pasta production with 3 million 326 thousand-ton production amount and 24,6% share rate as of 2013 data. The production amount of Italy in 2010 was 3 million 194 thousand tons and the share in world production was 25,1%. When these data are compared; it is seen that pasta production in Italy decreased a little in the last 3 years. Despite this small amount of decrease, Italy is the world’s largest producer with today’s production amounts. USA with 2 million-ton production and 14,8% share, Brazil with 1 million 191 thousand-ton production and 8,8% share and Russia with 1 million 83 thousand-ton production and 8% share follow Italy. When the production amounts and share of these countries in 2010 are reviewed; it is seen that USA’s production amount was 2 million 532 thousand tons and its share in the production was 19,9%; Brazil’s production amount was 1 million 300 thousand tons and its share in the production was 10,2%; Russia’s production amount was 858 thousand tons and its share in the production was 6,7%. According to that; while the pasta production in USA has decreased in 2013 compared to the one 3 years ago, there was increase in the production in Brazil and Russia. Ranking 5th in world pasta production, Turkey, which had 606 thousand-ton production amount and 5% production share in 2010, has had a significant increase in production in 2013 and has increased its production amount to 1 million tons and the share in the production to 7,4%. However; despite the increase in the production, the ranking of Turkey in world pasta production hasn’t changed. While Italy, USA and Turkey that are among the top producers continue their production activities by focusing more on export; the other countries produce pasta only for their domestic market demands. EU countries realize approximately 51,2 percent of the world production (EU countries 36.4%; other European countries 14.8%). While almost 38 percent of world production is carried out in the American continent (Central and South America 21.8%; North America 16.1%); the share of Middle Eastern countries in the production is 4.4% and the share of African countries is 4,3 percent. Asian countries and Australia have too little shares in world pasta production. However these regions are seen as potential markets in terms of export due to their consumption amounts. In the recent years; Asia-Pacific countries such as China, Japan, South Korea and India take steps to increase their pasta production to meet high national and regional demands. WORLD PASTA CONSUMPTION AND DEMAND Properties such as having high nutritious value, being sold for a cheap price, being easily stored and prepared, the modern technology used in its production, being available easily, the feature of increasable in nutritional value and taste with additional sauces are the main reasons of the increase. Since it can be prepared with many different ingredients, it is accepted by different societies with different food cultures. Each of these societies can cook pasta according to their own unique taste. The increase of pasta production, which was 9.3 million tons in 2001, to 10 million 446 thousand tons in 2003 and approximately 13.5 million tons in 2013 is the most important indicator of the demand increase in pasta throughout the world. When the data of IPO on 2013 is reviewed; the country with highest pasta consumption per capita in the world is Italy with 26 kilograms just like in 2010. Venezuela with 13.2 kilograms, Tunisia with 11.9 kilograms, Greece with 10.6 kilograms, Switzerland with 9.2 kilograms and Sweden with 9 kilograms follow Italy that ranks first in consumption just like in production. When 2010 per capita consumption amounts of these countries are reviewed; it is seen that the highest increase is realized in Venezuela (Venezuela with 12 kilograms, Tunisia with 11.7 kilograms, Greece with 10.4 kilograms, Switzerland with 9.7 kilograms and USA with 9 kilograms followed Italy in 2010). Turkey’s pasta consumption per person is 6.6 kilograms (6 kg in 2010). The reasons behind this insufficient rise in pasta consumption of Turkish can be counted as undeveloped sauce quality, lack of knowledge about pasta cooking methods, that variety in production just began, and unawareness about the nutritious value of pasta. Also; when we consider the fact that traditionally homemade noodle in Turkey is not recorded, it can be easily concluded that pasta consumption per person is much higher than this figure in the records. WORLD PASTA IMPORT According to the data of World Trade Atlas Global Trade Information Service; pasta import, which was 2,9 million tons, reached 3,2 million tons in 2011. Decreasing a little in 2012, the import was around 3 million tons. The value amount of pasta import in the same periods was 3.059 million Euros in 2010, 3.345 million Euros in 2011 and 3.651 million Euros in 2012. When the world pasta import is compared on amount and value basis; it is seen that there is increase on value basis despite the decrease in the amount. When the data of 2012 is taken as basis; it is seen that almost 36,3% of the import is realized by EU countries (Germany, France, England, Netherlands, Belgium). These countries realized 34,4% of the import in 2011 and 37,1% of the import in 2010. On country basis; USA takes the first place with 490.5 million dollars and 13,4 percent share. USA is followed by Germany with 459,1 million dollars and 12,5 percent, France with 397,6 million dollars and 10,8 percent, Japan with 260,8 million dollars and 7,1 percent and England with 213,7 million dollars and 5,8 percent. While these values show the ranking on value basis, Germany is the world’s largest pasta importer with 423.159 tons on amount-based ranking. The general demand for pasta products in the world increases steadily due to the increase in world population, increase in the interest towards western style foods with the increase of per capita income experienced in developing countries even though pasta is not part of their traditional cuisines, pasta to be tasty and cheap with high nutritious value, ease of preparation, and long preservation term, etc. Pasta products to be dependent on durum wheat as the main raw material and durum wheat to only grow in certain regions of the world put the countries that demand these products but don’t produce it at all or at an insufficient level that can’t meet the domestic demand into importer position. Sometimes, countries may also resort to import in order to ensure product variety in their domestic markets. WORLD PASTA EXPORT According to the data of World Trade Atlas; pasta export, which was 3,2 million tons in 2010, reached 3,5 million tons in 2011 and reached 3,7 million tons by increasing approximately 200 thousand tons in 2012. When the world pasta export is reviewed in terms of value; it is seen that the export, which was 3.487 million Euros in 2010, reached 3.820 million Euros in 2011 and 4.158 million Euros in 2012. However; it is impossible for the figures in world pasta export and import to be different from each other. The reason of the data differences of World Trade Atlas is that the institution uses the data of the reported ones. Thus, it is estimated that the real figures of pasta amounts and value subjected to the world trade are higher than these figures a little. When the pasta export on country basis is reviewed; it is seen that world’s largest pasta exporter is Italy. According to the data of World Trade Atlas; exporting 1,7 million tons of pasta on amount basis in 2010, Italy almost maintained this rate in 2011 and increased to 1,8 million tons in 2012. On value basis; Italy’s pasta export reached to 1.936 million Euros from 1.682 million Euros in the same period. Turkey is the second largest pasta exporter after Italy. Achieving to increase the pasta export significantly every year, Turkey realized 247 thousand tons of pasta export in 2011 and increased this export amount to 436 thousand tons in 2012 according to the data of World Trade Atlas. In the same period; Turkey’s pasta export reached 241 million Euros from 115 million Euros on value basis. The share of Turkey from world pasta export on amount basis in 2012 was 11,7%. In 2012; Turkey was followed by Belgium with 136 thousand tons and 217 million Euros, USA with 133 thousand tons and 167 million Euros, China with 108 thousand tons and 183 million Euros and Mexico with 75 thousand tons and 54 million Euros. When the data on world pasta export is reviewed on amount basis; it is seen that the highest increase in export was in Turkey in 2011 and 2012. While the export increase on amount basis in other countries was 30 thousand tons at most, it was 100 thousand tons in Turkey. PASTA INDUSTRY IN TURKEY The foundations of the pasta industry that is one of the leading sectors of Turkish food industry, were laid in first period of the Republic in Turkey. The industrialization of production of pasta, which was consumed only as homemade “noodle” previously, took place back in 1922. While pasta was continued to be produced in small facilities until 1950s, large plants were only began to be established in these years. After 1960s, the number of pasta plants in Turkey and production capacity tripled. In 1970s, the small facilities left their places to large capacity plants using advanced technologies. The installed capacity of Turkey which was 33 thousand tons/year in 1962 increased to 100 thousand tons/year in 1970s with the establishment of large plants, to 250 thousand tons/year in 1980 and to 530 thousand tons/year in 1993 with the increase in the installed capacities of old plants besides the establishment of the new ones. In Turkey, the production and the quality of pasta improved, the market began to compete with international markets and the number of plants increased to 26. The daily capacity of Nuh, one of these plants, is around 680 tons. And while the daily capacities of Durum (Arbel), Besler and Barilla are over 300 tons each; the daily capacities of Tat, Piyale, Doga, Kombassan, Selva and Mutlu are over 200 tons each. With the adoption of export-oriented industrialization strategy at the beginning of 1990s, a recovery had been observed in the pasta export of Turkey along with the synchronous growth in the domestic demand. Thus the large plants in Turkey began to increase their capacities. As a result, the total installed capacity reached the level 710 thousand tons/year in 1997 that Turkey achieved the highest level of pasta export. And as of 2010, Turkey is one of the largest pasta producer countries of the world with its installed capacity over 1 million 300 tons. However this capacity is estimated to increase up to 1 million 700 tons especially with the plant and technology investments of the companies in the recent years. Durum wheat, which is the raw material of pasta, is produced in Southeastern Anatolia, Central Anatolia and Western Anatolia. Thus the plants producing pasta in Turkey are generally located in these regions. While Southeastern Region takes the first place with 35 percent with the highest contribution from Gaziantep, this region is followed by Central Anatolia (40%) with the highest contribution from Ankara and Western Europe (25%) with the highest contribution from Izmir. 7 large companies, each with 170 tons/day installed capacity, supply more than half of the sector’s total capacity. Today, there are 22 factories in the Turkish pasta industry including large integrated facilities that can compete with the technologically developed countries by directing a significant part of their production to export, besides facilities that operate to fulfill regional demand. All pasta factories in Turkey produce the semolina required for their production in their own facilities. However, this is a system not widely seen among European and American producers, and it provides advantages such as low cost, standardization, research and development and high quality to Turkish producers. PASTA PRODUCTION AND CONSUMPTION OF TURKEY Even though pasta production in Turkey increases by years, it follows a fluctuating course in the recent years due to the developments in both domestic and overseas demand. The main factor affecting production is the yield of hard durum wheat and thus the production increase slows down in years where this yield is low. While the demand was in line with the increase in production until 1990s, later the production began to increase more than demand due to increase in export. Pasta production, which was 217 thousand tons in 1985, reached 295 thousand tons in 1990 with 35.9 percent increase, and 411 thousand tons in 1995 with 39.3 percent increase. In 1997, the production increased up to 455 thousand tons due to the rapid development of supermarkets in the domestic market, the increase of the share in retail food trade, the success of sectorial advertisements and promotions, the new investments and most importantly the export amount of 136 thousand tons. In 1998 and 1999, the companies operating in the sector had lost great market shares especially in Russia and Commonwealth of Independent States due to the global crisis and crisis in Russia. Due to these reasons, the production decreased 31 thousand tons compared to the previous year, and the decrease in export was determined to be 42 thousand tons. The increase in the domestic demand continued in 1998, however the economic crisis seen in Turkey after November 2000 and the continuance of this crisis in 2001 affected this extremely competitive sector negatively and the domestic demand had shrunk. With 2000 crisis, some of the companies had to stop productions for a while. And some had to decrease their capacity utilization rates to 25%. The companies tried to keep the price levels the same despite of the increasing costs in order to boost the domestic demand, and increased their exports by attaching importance to their export activities as a result of the extreme value loss of TL. Turkey that is now ranked ninth in world wheat production and sixth in the production of durum wheat, which is the main raw material of pasta, ranked 5th in world pasta production with a production of 851 thousand-ton in 2011. This data of production in 2011 was announced by Pasta Industrialists Association of Turkey (TMSD). In the data announced by International Pasta Organization IPO; it is stated that Turkey’s pasta production in 2013 has reached 1 million tons. The consumption of pasta in the world tends to increase both in the world and Turkey due to the properties such as having high nutritious value, being sold for a cheap price, being easily stored and prepared, the modern technology used in its production, being available easily, the feature of increasable in nutritional value and taste with additional sauces. Even though the domestic demand consistently increases as of years, the pasta consumption per capita is below the amount in the countries that have a voice in the pasta industry. It is estimated that the consumption amount per capita in Turkey as of 2012 is 6,1 kg. IPO announces this figure as 6,6 kg. Turkey ranks 21st in the world with the consumption amount of 6,6 kg per capita. When the regional distribution of pasta consumption per capita in our country is reviewed; it is seen that Marmara Region ranks first with a rate of 6.4 and it is followed by Aegean and Central Anatolia Regions. The pasta consumption per capita in Eastern and Southeastern Anatolia Regions is around 3.6 kg levels due to the reasons that these kinds of products are prepared at home and bulghur and noodles substituting for pasta have a great role in eating habits. In an evaluation conducted according to the last 3-year consumption figures on regional basis; it is seen that the consumption of pasta products has had a rapid development in Central Anatolia Region and consumption in Mediterranean Region has increased in a way to be able to meet the needs of “Catering” sector that has a demand revival highly with the effect of tourism. Medium thin spaghetti, spaghetti, noodle, corrugated tubes, ruote, perline, fusilli and bowtie pasta are among the mostly consumed pasta varieties in Turkey and different varieties are also among the product ranges of the companies for export in the recent years. Besides; vermicelli, grain-shaped pasta, letter and star-shaped pasta are also intensely consumed. PASTA IMPORT OF TURKEY Since the production capacity of pasta sector in Turkey is enough to fulfill the domestic demand, pasta import is at very low levels. The pasta import of Turkey is rather focused on luxury products, and these products are consumed in luxury hotels and restaurants. Instead of varieties that are widely produced in Turkey, varieties that are rarely seen are imported. While the pasta that entered into the dry food category is imported, pastas that are listed on “OTHERS” in customs tariff schedule are seen more. In 2010, one of the years with higher import volume, 2,082 tons of pasta was imported. In 2010, 62.8% of this amount was imported from Italy. In 2010, the import increased 16.7 percent compared to 2009 in terms of amount and 13.2 percent in terms of value and reached 5.2 million dollars. While Italy’s share in Turkey’s 2010 pasta import was 67 percent in terms of value, China’s share was 8.3 and Switzerland’s share was 5.8. In January-July 2011, Turkey’s pasta import reached to 3.5 million dollars with 24.7 percent increase in terms of value, and to 1,419 tons with 20.9 percent increase in terms of amount compared to the same period of the previous year. The superiority of Italy in pasta import is seen clearly in Turkey, as in other countries of the world. Even though Turkey doesn’t import pasta regularly from any other country than Italy, China and Thailand, the import levels change by year. PASTA EXPORT OF TURKEY In Turkey, pasta was exported for the first time in 1970 after 48 years since pasta industry started production in 1922. Despite the periodical fluctuations, important increases were recorded in Turkey’s pasta export in the long term starting from that period. Decreasing in terms of value as a result of the global crisis in 2009, the export was realized as 297 thousand tons with 186 million Dollars level value and increased 39.3% amount basis and 24.4% on value basis compared to the previous year. Ranking second after Italy in world pasta export today, Turkey closed 2011 with 405 thousand-ton pasta export to 142 countries. According to the data of World Trade Atlas; the export amount realized in 2012 was around 436 thousand tons. It is possible to examine the course of Turkish pasta export in general in two separate periods as 1970-1990 and after 1990 periods. In the first period; it is seen that pasta export entered into a consistent and quite rapid upward trend as a result of the opening of the new pasta facilities and the existing ones’ increasing their capacities. However; these increases couldn’t reach high levels as the domestic demand for pasta products was in parallel with the supply amount of these products and the amount differences did not let high external sale figures. Export amount of Turkey, which was only 13 tons in 1970, reached 2.197 tons in 1980 by increasing 169 times and 13.022 tons between 1980-1990 by increasing 6 times. In the second period of 1990 and after; production over domestic demand, which was formed as a result that industrialization strategy for export was heavily applied and the production amounts and capacity usage rates of the companies with export potential increased, increase export. On the other hand; the factors like that Turkish Republics with the declaration of their independence after the disintegration of the Soviet Union in 1990s emerged as new markets, the opportunity of purchasing durum wheat with the same amounts of world prices within the Inward Processing Permits and Customs Union Agreement coming into effect as of 01.01.1996 made contributions to the increase of the Turkey’s pasta export by years. However; despite all the developments made in the 30-year course of Turkey’s pasta export, important incidents that adversely affected the external sales power of the sector caused the decline of the pasta products export to the 1988 levels as of 1999 and 2000. When these incidents are reviewed in chronological order; the embargo put on Iraq, which was the 4th largest pasta products market of Turkey, as a result of the 1991 Gulf Crisis, the application Anti-Dumping and Countervailing Tax of USA as the most important export market of Turkey in 1996, Southeastern Asia crisis ,n 1997 and then Russian crisis in 1998 caused the failure of Turkish exporters to adequately assess the potential market. While USA between 1989 and 1995, Russian Federation between 1995 and 1999, Belgium in 2000 and Georgia in 2001 were the most important markets for Turkish pasta products exporters; United Arab Emirates and Azerbaijan emerged as the most important export markets in 2003 and 2004. While the most important export markets of Turkey in 2005, 2006, 2007 and 2008 were United Arab Emirates, Iraq and Benin; Angola, Benin, Iraq, Togo and Japan were the most important export markets in 2012 respectively.
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