May 10, 2017 / 4:26 PM / a year ago

Italy seeks pasta labels, Canada worries about durum sales

WINNIPEG, Manitoba/ROME, May 10 (Reuters) - Italy has formally asked the European Commission to allow it to require country of origin labels on pasta sold there, raising alarm for Canadian durum wheat exporters who fear the move will dampen sales.

Italian Agriculture Minister Maurizio Martina tweeted on Monday that Italy had sent a decree to Brussels spelling out proposals to label pasta and rice packets to show the origin of the raw materials. Rome had send a draft decree of its intent in December, but had not until now taken the formal step.

Italy is proposing that pasta packets show where the wheat was grown and where it was milled.

Canadian exporters and farmers fear the move would depress prices in Canada, the biggest global durum exporter, as it would require Italian pasta makers to segregate supplies by country. Italy’s move comes as a Canada-Europe free trade deal moves to its final stages of approval.

“It’s something that causes us significant concern because it will increase the cost of moving durum into Italy,” said Cam Dahl, president of industry group Cereals Canada, whose members include grain traders Cargill Ltd, Richardson International and Louis Dreyfus Corp.

Italy is Canada’s second-biggest foreign durum buyer so far in 2016-17, purchasing 522,000 tonnes from August through March, according to Canadian government data. Annual Canadian sales to Italy are worth some C$248 million ($181.46 million), based on average export volumes and International Grains Council price data.

The European Commission said it had not yet received official notification from Italy and that it would then have three months to make observations. If there are no observations, the member state is free to go ahead with its plans.

European lawmakers have shown an increasing appetite for labeling due to consumer demands for information about food, and Italy has also said labeling would help its pasta industry better compete with foreign competition.

Canadian durum farmers last year grew their biggest-ever crop. They are expected to sow less durum this spring after disease downgraded quality last year.

Cereals Canada will travel to Italy late this month to meet with pasta industry groups and to Brussels to meet with European Union officials.

Canadian Agriculture Minister Lawrence MacAulay could not be immediately reached for comment. Canada and Mexico won a similar labeling fight over United States meat labels in late 2015.

India and Thailand are the biggest global rice exporters.

$1 = 1.3667 Canadian dollars Additional reporting by Philip Blenkinsop in Brussels; Editing by Chris Reese

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