A unique market/
Carlo Scazzola on canning pulses in Italy

Agras Pulses mainly sources products for the Italian market. What are the most popular pulses and beans?

The majority of our business is from abroad to Italy; sometimes we have the possibility to sell from Argentina to Vietnam, for China, or something to Turkey, but it’s mainly to Italy.

The Italian market is a different market than in other European countries because it’s concentrated in canning companies, who generally export almost 90% of their product. So, we usually import all kinds of beans that are not specifically for the domestic market but that are canned in Italy and then exported. We import a lot considering our market. For example, navy beans are imported and then worked in Italy—in the Naples area or in the center of Italy—to become baked beans: the navy beans with tomato sauce that are so popular in the UK and Northern Europe. But those baked beans are not used in our domestic market.

There are some beans that are used in our domestic market—such as alubias, cranberry, Great Northern and some navy beans—but we import much more than our domestic need. The canning factories were started for tomatoes, especially in the tomato-growing regions in Campania and the south, and then these factories started to branch out to vegetables and pulses.

If Italy is importing so much to support the canning industry, how have the EU import tariffs affected business over these past few years?

It’s been a big problem. For some products, we’ve been obliged to pay the import duty of 25%, particularly for dark reds. We import a lot of dark red into Italy but about 90% is re-exported because we don’t use them in our domestic market. It is a similar situation with navy beans. The big canners have just had to pay the duty. Now the tariffs have been lifted but the prices have stayed the same. 

Have you also noticed an increase in prices as a result of the crop failures in the US and Canada?

Yes. Sometimes it’s very difficult to believe that there are all these disasters! In 2021, Canada had huge problems due to rain just before the harvest and the same thing happened in 2020. It’s been very difficult to find offers to get goods to propose in the market. And when there are such high prices, it’s not easy for anybody. 

Logistics is the real disaster right now. We have containers to be shipped from Canada and every day we receive a new booking, and then another, and then another. Nobody knows when the container can be shipped and the freight rates have been terrible for contracts that were made pre-campagna: at the very start of negotiations. Nobody was expecting a situation like this. 

The shippers have lost a lot of money, and we’ve started to include a freight clause in contracts. So before, if the contract is based on, say, $2250 per container, any change plus or minus is for the buyer’s or seller’s account. But now, we will send an invoice to buyers with a freight clause of $6,000 or $7,000. They go crazy! So now, as a broker, I need to supply them with steamship company invoices and a lot of documents to show the exact details of the freight difference. Otherwise, they won’t pay. It’s a lot of extra work for everyone; it’s really been a disaster. 

If the steamship companies can guarantee a rate for 6 months, then we can sell in advance today for March or April. But if the shipper or the buyer are unsure of the freight rates involved, it becomes very difficult. We can include a freight clause, and then whatever happens will be settled, but otherwise, buyers have to buy containers now for prompt shipment each month. Or of course, some buyers are buying from different origins from which we don’t have this kind of problem. For example, for alubias from Argentina, there is this problem of high freight, but it’s not the same from Egypt. There, they usually sell not for prompt shipment but for a maximum of one month. 

Are you finding that customers are sourcing now from different countries to try to avoid the freight problems and high rates? Do you help with sourcing, or do customers come to you and say, “I want these beans from this place”?

If it’s possible for them to source from elsewhere, yes. If they have an alternative, why not?

But there is another problem. For example, I can buy dark red from another place but only if they have the same specification. For packaging, it doesn’t matter so much but, for canning, there are some origins that don’t work so well. So we have to buy in North Dakota, Minnesota, or Canada, because those beans are suitable for canning. Sometimes, some Argentinian product is also suitable. It depends. For packaging, you can buy everywhere: where you find the better price, better freight. But for canning, you need something suitable for canning. For example, cranberry bush is not suitable, but cranberry vine is.

Have you seen a change in Italian pulse consumption related to the “plant-based” movement?

I don’t see any particularly big change here. There is a small increase because people are looking to change the way they eat but it’s minimal because our per capita consumption of pulses in Italy is very low. We eat lentils but in their whole form. We use beans for soup, but they’re never the main dish. 

In many countries, yes, there is a change. You can get pasta made from yellow peas or lentils. This is not commonly consumed here; we still eat normal pasta. But, of course, this can change! 

How has the Italian pulses industry evolved since you’ve been in the business?

Many years ago, people preferred dry pulses but now people have no time to cook. Everybody wants to work, nobody wants to stay at home and it’s much easier to just open a can and eat beans that are already cooked. Now, I think at least 70% of the pulses market is canned and 25-30% is dry products. 

Did you see an increase in demand for canned products as a result of Covid and lockdowns?

In the first lockdown, we sold a lot! When people have the idea that something could happen, they don’t buy fresh products. For today and tomorrow, maybe, but if you’re worried, you buy lots of canned products. We were very successful; somewhat unfortunately, I benefited from the situation! I was in the office a lot because the canners were constantly asking for products for prompt shipment. Now though, it’s done. Everyone has their cans now. Unused!

With your decades of experience, is there anything that you feel is particularly relevant at the moment?

In my opinion, the market needs stability; it’s not only a matter of price. Of course, at this price level, domestic growers are interested in increasing their production. If they produce pulses, chickpeas, beans and lentils, there’s a benefit for them. Pulse growing in Italy practically disappeared but now we’re producing 25,000-28,000 tons. It’s not a lot, but it’s growing. So the market price has a big influence on people’s decisions and it can change the market perspective. 

Do you see domestic production having a big effect, or is production just too small?

No, it’s small. It can be increased, but Italy cannot produce anywhere nearly enough to cover demand. We produce next to nothing in white beans like alubias and we import 25,000 tons per year. Nobody’s in the position to produce large volumes. Chickpeas are a little better because we’re already producing between 15,000-18,000 tons per year in the south and the center of Italy. It’s starting to be an interesting quantity to cover the domestic demand but Italy can never produce enough for the total demand. We will be importing pulses for many years, I’m sure!