ALGIERS, ALGERIA — Algeria, on the north coast of Africa, operates a highly controlled and managed grains sector. A traditional customer of France, the country has turned more to Russia for its wheat supplies in recent times. Trade experts see the reasons for the switch as everything from political tension between France and Algeria, to a straightforward price calculation.
In its Grain Market Report of Feb. 17, the International Grains Council (IGC) put Algeria’s total grains production in 2021-22 at 4.3 million tonnes, compared with 5.8 million the previous year. The wheat crop is put at 3 million tonnes, down from 3.8 million the previous season, while output of barley is estimated at 1.2 million tonnes, down from 1.8 million.
The IGC forecasts Algeria’s total grains imports in 2021-22 at 12.6 million tonnes, compared with 13.2 million in 2020-21. Imports of wheat are put at 7.1 million tonnes, down from 7.7 million. Imports of maize are expected to total 5 million tonnes, up from 4.7 million the previous year. Barley imports are seen falling to 500,000 tonnes, from 800,000.
In an update on the grains sector dated Jan. 31, the USDA attaché in Algiers noted that “rising concerns over world wheat supply due to crop quality forced global importers to speed up purchasing to secure their required volumes despite price increases.”
“Reports from traders indicate that the Algerian Office of Cereals (OAIC) continued buying bread wheat and durum on the international market throughout 2021 and are continuing to do so into 2022,” the attaché said. “Reports also indicate that Algeria was again a top destination of 200,000 tonnes of wheat from Russia in December 2021.”
In November 2021, the Algerian Arabic outlet ENNAHAR reported that French wheat imports have fallen from 56% of Algeria’s total wheat imports to 24% since the beginning of 2021, the attaché noted.
“Russia, one of the world’s largest wheat exporters, has been lobbying for access to Algeria’s market,” the attaché noted. “The Algerian market has been traditionally dominated by France.”
The attaché explained in an annual report, dated April 1, 2021, that “in July 2020, the Algerian government implemented a new policy to develop the agriculture sector. This new strategy aims to achieve food security, increase domestic production, reduce imports of some expensive commodities by encouraging investments locally to develop the strategic agricultural sectors.”
The Minister of Agriculture presented a five-year (2020-24) roadmap for the development of agriculture on July 26, 2020.
“On Feb. 9, 2021, the Minister indicated to the Algerian Senate Agriculture Committee that the new strategy aims to significantly reduce imports by $2.5 billion of some expensive agricultural commodities, including grains, milk powder, sugar, and vegetable oils,” the report said.
Citing government reports, it added that “the government aims to reduce the import bill for bread (common) wheat by ($400 million), corn by ($17.6 million), vegetable oils by ($983 million), sugar by ($555 million), industrial tomatoes by ($55 million) and potato seeds by ($42 million) as well as garlic by ($12 million).”
The attaché explained that the government intends to diversify the economy to achieve sustainable growth and hopes to attract investment outside the energy sector.
“In the context of the new strategy, the Algerian government encourages modern industrial agriculture, using new technologies, digitization as well as innovative tools and renewable energies,” the attaché said. “The new policy prioritizes investment in agricultural products to ensure food security in Algeria.
“The government encourages large-scale agricultural investments in the highlands and the Sahara (South of Algeria). In addition, it promotes foreign direct investment and partnerships, particularly in the field of cereals, oilseeds, and sugar productions as well as crushing and refinery projects that generates processing to support the processing industry. Such projects include supporting the increase of grain storage facilities as well as cold chain and packaging projects. At the same time, the Ministry of Agriculture is creating an office to promote industrial agriculture investments in those areas.”
In a Jan. 31 update, the attaché reported that the “Minister of Agriculture, Abdelhafid Henni, who was appointed in November 2021, indicated during the Nation’s Council plenary that his sector was working to increase the Algerian Office of Cereals (OAIC) storage capacity.”
“Currently Algeria’s grain storage capacity is 28 million quintals (2.8 million tonnes),” the attaché said. “The goal is to build 30 storage silos; 16 have been built while the remaining 14 are experiencing a delay in completion.”
On Jan. 16, during the Minister’s Council, President Tebboune decided to increase prices for domestic grains procurement from farmers to encourage grain collection and improve production to ensure food security, the attaché said.
The attaché explained in the annual report that “like other North African countries, Algeria is a major consumer of cereals and considers wheat a staple. Bread (common) wheat is mainly used to produce bread. Durum is used to produce pasta and couscous.”
“Wheat consumption will remain relatively stable with normal growth for the near future,” the attaché said. “The government is not providing new agreements to new mills, nor expanding the old ones.”
Flour milling sector
According to the government, there are currently 432 flour mills in operation in Algeria, but a regional expert told World Grain that the actual number in operation is somewhere between 390 and 400, with a capacity estimate at about double their actual output of around 13 million tonnes a year. The sector is entirely controlled and regulated by the state, with a system of quotas for the distribution of wheat to the mills by the national cereals office OAIC, on the basis of their theoretical capacity. Prices at different stages of the wheat to flour to bread processing chain are controlled by the government.
“However, the government still aims to reduce imports of bread wheat,” the attaché said. “Thus, it continues to sensitize consumers to decrease consumption of bread to avoid waste in order to decrease demand on bread (common) wheat. This may affect consumption in the future.”
Barley is consumed mainly as grain in animal feed by sheep, cattle, and camels, with small amounts consumed as green fodder, the report said. Minor amounts are used for human traditional foods (couscous and bread).
“Algeria’s breweries consume small amounts of barley, generally imported from Europe,” the report said. “Barley consumption is a function of weather-related pasture conditions. In general, bad pasture conditions result in increased demand for imports.
“Consumption has trended upward since 2000, with increasing animal numbers, particularly sheep. Demand will increase slightly with the new development plan that encourages camel and goat breeding in the south of Algeria.”
In an Oct. 21, 2021, report on agricultural biotechnology in Algeria, the attaché explained that a Ministry of Agriculture decree of Dec. 24, 2000, “prohibits all import, production, distribution, and commercialization and utilization of genetically engineered plant materials.”
“This decree prevents Algeria from developing, commercializing, or importing genetically engineered (GE) products, including live plants or pieces of live plants, including their dormant buds, tendrils, grafts, tubers, rhizomes, cuttings, shoots, or seeds intended for propagation and reproduction,” the attaché said. “The only exception is for research purposes.”
The report noted that media reports, the main source for consumers’ awareness of biotechnology, are “usually unfavorable, especially when it relates to the food and agricultural sectors.”