Algeria is the largest country by area in Africa, but with four-fifths of its area covered by desert, the availability of agricultural land is limited, making it a major importer of grain. The government manages the market to keep down the price of bread.

According to the International Grains Council (IGC), Algeria’s total grain production in 2011-12 will be 4.6 million tonnes, down from 4.7 million the year before. Total wheat production is put at 3 million tonnes, down from 3.1 million. That includes durum production of 2.5 million tonnes, up from 2.2 million.

Barley production is forecast at an unchanged 1.5 million tonnes.

Total grain imports for 2011-12 are forecast at 8.1 million tonnes, down from 8.2 million in 2010-11. Imports include 5.4 million tonnes of wheat, down from 5.9 million. The IGC also predicts barley imports of 200,000 tonnes, up from 100,000. It is expecting durum imports of 1.1 million tonnes, down from 1.2 million in 2010-11.

The total Algerian market is about 8.4 million tonnes of all wheat, including about 3.4 million tonnes of durum. With a population in Algeria of about 34 million that consumes about 245 kg per person per year of durum, it is the preferred bread wheat in Algeria as in a large part of North Africa. It is used for traditional bread.


The Algerian grain sector is dominated by the Office Algerien Interprofessionnel des Cereales (OAIC), the government grain agency.

“The OAIC is the state buying agency,” Sarah Mann, manager at the British export promotion body British Cereal Exports, told World Grain. “They’re not just solely responsible for imports. They do internal trade as well. They even own land in Algeria. They are a bit more than just a state buying agency.”

OAIC also imports other products including beans, pulses and rice. “Their main aim is to keep food prices low for the people,” she said. “As long as the price of wheat stays below a certain level that they set down, the private sector can import direct.”

“When the price goes above the threshold that the OAIC sets, private buyers can’t import direct,” she said. “They can only buy their wheat from the OAIC from the price that the OAIC sets. Whatever price the OAIC buys the wheat at doesn’t matter; they subsidize it down to the price they set. It’s designed to reflect keeping the price of a baguette at the same level.”

There are limits designed to make sure that the state is not subsidizing too much grain. She noted that when the OAIC steps in and starts importing on behalf on the industry, it has limited the amount the millers can buy so that they can satisfy internal demand, but no more.

“They can’t profit out of buying wheat for a lower price from the OAIC,” she said. “The private sector finds that a bit frustrating.”

Algeria’s milling sector is now privately owned. There are around 330 mills, 10 of which have a production capacity of more than 1,000 tonnes a day.

“With the number of private mills increasing drastically in the last 10 years, industry analysts estimate the total milling capacity to be twice the total that Algeria needs,” USDA attaché said in a review published earlier this year. “Almost none of the Algerian mills have been operating at full capacity for various reasons, including inefficient management and mandated supply restrictions by the government grain buying agency (OAIC).”

Mann has started to focus on individual processors. She put the number of milling companies at between 30 and 35. “We have a good relationship with one of the biggest, which is a company called SIM. They import into the port of 10 areas. They told us last year that they were trying to set up a millers association.”

So far that plan has not come to fruition.

In a report published earlier this year, the USDA attaché described how the market had been managed in recent times.

“OAIC stopped durum imports in April 2009, citing good domestic stocks from the harvest that year,” he said. “However, private importers continued to buy durum until the government imposed a tax on private durum imports in August 2010 to encourage local millers to buy locally instead of going abroad.”

The tax has since been suspended, according to a report by the Echorouk website in May. Algerian Commerce Minister Mustapha Benbada said the decision will fix the loss of balance in the national market in terms of semolina.

He added that the decision came following an explosion of the durum wheat price in the world market. “That will make the National Office of Grains safe from export expenses,” he said.

The ministry had met with mill owners who wanted to import wheat. “That would enable them to have a wheat stock and to boost the pasta industry,” he said. “They can export wheat, provided that they respect the limited prices.”

Durum imports are projected to increase in 2011 as the OAIC has returned to the international grain market, the attaché said. The report also noted that the government had announced new measures to control consumer prices for staple foods.

“For wheat, the ongoing subsidy of wheat supplied to mills remains unchanged,” it said. “However, the OAIC did increase the quota of bread wheat supplied to mills from 50% to 60% of milling capacity starting Jan. 9, 2011.”

The attaché also explained how the OAIC subsidizes the price for durum and bread wheat to millers. “They resell bread wheat to millers at 1,285 Algerian dinars ($17.7) per quintal and durum at 2,280 Algerian dinars ($31.41) per quintal,” the report said. “

The differential between the import price and the sale price to millers is supported by the government. GOA also continues to put a ceiling on retail bread and bread flour prices (Decree of April 1996) and semolina (2008).”


The attaché pointed out the European, particularly French, dominance of the Algerian import market.

“The European Union is Algeria’s major agricultural trading partner, with 43.5% of agricultural and food imports coming from E.U. countries,” it said. “France controls the largest share of Algeria’s agricultural import market. In 2010, France remained Algeria’s top wheat supplier.”

France supplies 97% of imported bread wheat and holds second place behind Canada for durum, with the U.S. in third place.

“U.S. suppliers remain less competitive in this market due to the lack of direct shipping lines between the U.S. and North Africa,” the attaché report said. “U.S. exporters face stiff competition from E.U. suppliers. The transshipment of U.S. exports through Europe significantly increases shipping costs to Algeria.”

Mann sees opportunities in Algeria’s desire to diversify its supplies.

“They do realize that they are exposed a little bit by relying on one supplier,” she said. “French exporters are very strong in Algeria. They are looking for a variety of suppliers.”

The British aren’t the only ones trying to expand their share of the market. U.S. export bodies are also working on it.

“The U.S. Wheat Associates, through its office in Casablanca, Morocco, the U.S. Grains Council in Tunis and the American Soybean Association, through its resident consultant, are currently engaged in various market development activities in the Algerian market,” the attaché said. “These include technical workshops and seminars, trade missions and technical exchange programs in the U.S. such as the Cochran Program. These parties are working closely with the Algerian millers, importers, feed manufacturers, poultry and dairy cattle farmers to provide technical assistance and to promote the quality aspects of U.S. products in order to expand the U.S. share in this market.”