USGC re-engages in evolving Algerian market

by World Grain Staff
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WASHINGTON, D.C., U.S. — The U.S. Grains Council (USGC) said on Oct. 27 that it is re-engaging in Algeria, where a long-established council program was shut down in the 1990s as Algeria’s civil war put operations and staff at risk.

“Our programs continued to bear fruit after we pulled out,” said Cary Sifferath, USGC regional director. “For a number of years, Algeria maintained its position as one of the top 10 export markets for U.S. corn.”

U.S. market share has declined, however, over the past several years, in large part due to an Algerian misperception that Argentine corn produces better feed performance in poultry than U.S. corn. Algerian poultry producers currently pay a premium as high as 10% for Argentine origin corn even when there is no premium on the world market. Last year, U.S. corn sales to Algeria dropped to just 100,000 tonnes (3.9 million bushels) from a high of 1.3 million tonnes (52.9 million bushels) in 2001-02.

“We see the poultry sector as being the demand driver in corn,” said Sifferath. “We are working now to identify viable market development partners.”

A council team from ONAB, Algeria’s quasi-governmental national poultry program, recently traveled to Kansas State University for a short course on buying and pricing U.S. corn and to meet with U.S. suppliers of corn and DDGS. Algeria’s government recently put ONAB in charge of 30% of the nation’s annual corn and soybean meal imports due to concerns about inconsistent supplies and price gouging.

“ONAB doesn’t share the misperceptions about the feed value of U.S. corn,” said Sifferath. “We expect that working directly with ONAB and providing technical training on corn use in poultry will help us increase U.S. market share and lead to greater price competition in the marketplace.”

The council’s work with ONAB may also pay off for DDGS exports, according to Sifferath.

“They have become a major supporter of efforts to lower Algeria’s 30% import duty and 17% value-added tax on DDGS imports,” he said. “We hope to open the Algerian market for DDGS as we move into 2012.”
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