Algeria is a major importer of grains to feed a large structural deficit in its food supply which is likely to continue despite ambitious plans to increase production. The country plans improvements in farming techniques and infrastructure but is likely to remain a big market for grains, with European exporters, particularly France, the main suppliers.
The International Grains Council (IGC) puts Algeria’s total grain production in 2015-16 at 4.4 million tonnes, up from 3.3 million the year before. The figure includes 3 million tonnes of wheat, up from 1.9 million the previous year, and an unchanged 1.3 million tonnes of barley.
Total grain imports are put at 12.5 million tonnes, down from 12.6 million the year before, with imports of wheat at 7.3 million tonnes, down from 7.4 million. Maize imports in 2015-16 are estimated at an unchanged 4.4 million tonnes, while barley imports are put at 700,000 tonnes, down from 900,000.
The IGC puts Algeria’s durum wheat production at 2.5 million tonnes in 2015-16, up from 1.3 million the year before, while imports of durum have fallen to 1.6 million from 1.75 million.
Algeria’s 2015-16 soymeal imports are put at 1.2 million tonnes, up from 1.1 million in 2014-15.
In a Country Brief on Algeria published in October, the United Nations Food and Agriculture Organization pointed out that “even in years of ample domestic production, Algeria relies heavily on cereal grain imports from the international market, with common wheat being the most prominent.”
In the last five years, the country imported an average of almost 6 million tonnes of wheat, averaging 70% of its domestic utilization, it said.
“The wheat import requirement for 2015-16 (July/June), is projected to remain unchanged at 7.2 million tonnes compared to 2014-15, owing to depletion of stocks accumulated during two consecutive years of good harvests in 2012 and 2013.”
The countries exporting wheat to Algeria include France, Canada, Germany, the U.S., Spain and Mexico, it said.
“Food accounts for 43% of total households’ expenditures in Algeria. Accordingly, overall inflation rates are heavily influenced by food inflation,” it said. “The annualized rate of food inflation in August 2015 reached 3.7. Bread, dairy, milk, sugar and cooking oils benefit from ongoing government subsidies.”
An annual report on the Algerian grains sector from the USDA attaché explains the importance of grains to the country. “Algeria is a major consumer of cereals,” it said. “Wheat is the staple grain of food and accounts for about 75% of the calories consumed.”
It cited government figures which show that per capita cereal consumption has more than doubled in the past 50 years to 285 kg per capita. The attaché put Algeria’s total demand for grains at about 8 million tonnes.
The attaché explained that France is the major wheat supplier to Algeria, representing 52% of marketing year 2014 imports despite the weather damaged crop of 2014-15.
“In good years, France supplies 75% to 80% of the bread wheat and 59% of durum,” the report said. “U.S. origin total wheat imports have declined sharply along with the other U.S. commodities due to price competitiveness. U.S. origin products still face stiff competition from European suppliers on price and shipping flexibility.”
The attaché explained increased 2015 grains production.
“Abundant rain in January eliminated deficits in moisture that developed earlier at the beginning of the growing season, allowing satisfactory crop development in major production areas,” the report said. “Furthermore, indications are that farmers are planning more and more certified seeds along with certified fertilizer which may result in higher yields.”
The Office Algérien Interprofessionnel des Céréales (OAIC) imports and buys domestic grain and is the main supplier to domestic processors, the attaché report explained. “According to reports, OAIC supplies 100% the public sector’s requirements and 60% of private processor requirements,” it said. “On average, OAIC supplies 450,000 tonnes of bread wheat and 230,000 tonnes of durum per month.”
Algerian wheat consumption has risen slightly in recent years as a result of increased urbanization, population growth as well as increased milling capacity, but is projected to remain more or less stable, the attaché said.
“After the craze for investment in the milling industry, many wheat and flour mills expanded after the opening of the market and privatization in 1998,” it said. “Recently, there has not been any new investment in the sector and currently about 430 mills are operational in Algeria.”
Barley is consumed mainly as grain in animal feed by sheep, cattle, and camels, with small amounts consumed as green fodder, and minor amounts used for traditional foods, it said.
“Algeria’s breweries consume small amounts of barley, generally imported from Europe. Barley consumption is a function of weather-related pasture conditions — in general, better pastures conditions result in decreased demand for imports.
Consumption has trended upward since 2000, with increasing animal numbers, particularly sheep, better rations that include more barley, and efforts to introduce barley into the dairy ration. Consumption is projected to remain relatively stable, depending on pasture conditions.”
The attaché also explained that government efforts to develop the dairy sector have generated increased demand for maize imports to satisfy demand from dairy and beef producers.
“A movement toward increased modernization in the sector is taking root,” the report said. “Industry sources indicated this could help U.S. origin corn prospects.”
It explained that U.S. exports have resumed after a long departure from the market.
“This void was filled by Argentina, which has been the leading corn supplier since 2008,” it said. “U.S. exports represented 2% of MY13 imports. Trade contacts attribute this decline in U.S. corn exports to Algeria to price, competition from Black Sea suppliers, and Algeria’s preference for certain quality aspects and specifications of Argentine corn.
“The U.S. feed industry should seize this opportunity by engaging in technical trade servicing to address misperceptions about U.S. feed quality,” the attaché suggested.
The attaché also explained that U.S. exports of DDGS to Algeria began in 2008 for feeding trials conducted in some regions with the expectation of increased usage by poultry and livestock farmers.
Algeria’s rice imports are very irregular but have increased with changing dietary habits, the attaché said.
“Private importers buy small containers when prices appear competitive, mainly from India, Vietnam, and Thailand,” it said. “There were no imports from the U.S. in 2014. U.S. rice exports were 11% of the market in CY 2010 and 4% in CY2012.”
Grain production plan
Algeria is aiming to boost its grain production to an average of 6.7 million tonnes in 2015-19, Mohamed Belabdi, general director of the OAIC, said at last June’s International Grains Council Conference in London. The plans include raising the total irrigated area to 2 million hectares from the current 900,000, with the area of irrigated cereals rising to 600,000 hectares from the current 60,000. Much of the equipment is being supplied by OAIC.
OAIC also has a plan to improve storage infrastructure.
“Algeria has not invested in storage facilities since 1988,” the attaché’s annual report on the grains sector said. “The Algerian grain agency (OAIC) has been tendering for the past few years for the construction of 39 ready grain storage silos (nine reinforced concrete silos and 30 metal silos) to store durum, bread wheat and barley to increase grains storage capacities. OAIC committed to supporting building an additional 8.2 million quintals of storage capacity in 2012 and another additional 8.4 million quintals by 2019.”
Population: 39,542,166 (July 2015 est.)
Religions: Muslim (official; predominantly Sunni) 99%, other (includes Christian and Jewish) <1% (2012 est.).
Location: Northern Africa, bordering the Mediterranean Sea, between Morocco and Tunisia.
Government: Republic. Chief of state: President Abdelaziz Bouteflika (since April 28, 1999); head of government: Prime Minister Abdelmalk Sellal (since April 28, 2014).
Economy: Algeria’s economy remains dominated by the state, a legacy of the country’s socialist post-independence development model. In recent years the Algerian government has halted the privatization of state-owned industries and imposed restrictions on imports and foreign involvement in its economy. Hydrocarbons have long been the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the 10th-largest reserves of natural gas in the world and is the sixth-largest gas exporter. It ranks 16th in oil reserves. Strong revenues from hydrocarbon exports have brought Algeria relative macroeconomic stability, with foreign currency reserves approaching $200 billion and a large budget stabilization fund available for tapping. In addition, Algeria’s external debt is extremely low at about 2% of GDP. However, Algeria has struggled to develop non-hydrocarbon industries because of heavy regulation and an emphasis on state-driven growth. The government’s efforts have done little to reduce high youth unemployment rates or to address housing shortages. A wave of economic protests in February and March 2011 prompted the Algerian government to offer more than $23 billion in public grants and retroactive salary and benefit increases, moves which continue to weigh on public finances. Long-term economic challenges include diversifying the economy away from its reliance on hydrocarbon exports, bolstering the private sector, attracting foreign investment, and providing adequate jobs for younger Algerians.
GDP per capita: $13,900 (2014 est.); inflation: 2.9% (2014 est.); unemployment: 10.6% (2014 est.).
Currency: Algerian dinars (DZD) 106.95 dinars equal 1 U.S. dollar (Dec. 22, 2015).
Exports: $60 billion (2014 est.): petroleum, natural gas, and petroleum products 97% (2009 est.).
Imports: $59.67 billion (2014 est.): capital goods, foodstuffs, consumer goods.
Major crops/agricultural products: Wheat, barley, oats, grapes, olives, citrus, fruits; sheep, cattle.
Agriculture: 10% of GDP and 14% of the labor force.
Internet: Code: .dz; 6.5 million users.
Source: CIA World Factbook