Algeria produces grain, but with only a tiny proportion of its area suited to arable farming, it is left with a shortfall which makes it one of the world’s biggest importers. The government has lightened its touch on the agricultural sector, but it is still trying to encourage production and cut imports.
According to the International Grains Council, Algeria’s total grains production in 2009-10 will come to 5.1 million tonnes, a sharp increase on the 1.7 million produced the year before, due to much improved weather. The wheat crop is put at 3 million tonnes, up from 1.3 million. Barley is put at 2 million, up from 400,000 a year before.
Total grain imports for 2009-10 are estimated at 7.5 million tonnes, down from 8.9 million the year before. Wheat imports are estimated at 5.2 million tonnes (6.3 million) maize at 2.2 million (unchanged) and barley at 100,000 tonnes (400,000).
Algeria’s large-scale imports make it very interesting to Europe’s grain exporters. One organization that keeps a close eye on the market there is the U.K.’s cereals promotion body British Cereal Exports. "The market is in a state of transition from state control," Sarah Mann of British Cereal Exports explained. "You’ve got new private operators opening up the market."
However, Algeria’s national cereals office, the Office Algerien Interprofessionnel des Cereales (OAIC), retains an important role. "Up until 1995, OAIC maintained a monopoly of cereal imports. It still accounts for most of the wheat that’s imported," she said. "We reckon that there are about 300 private sector mills, which account for 7.4 million tonnes of total milling capacity, which we reckon is about 10 million tonnes."
The government still believes in playing a role. Speaking in February at the Afro-Arab Food Security Summit in Egypt, Agriculture Minister Rachid Benaissa said Algeria plans to cut wheat imports by at least two-thirds through 2014. He said that Algeria’s wheat production was expected to be 4 million tonnes in 2009-10. Algeria has cut its grain import bill by about 41% in the first nine months of 2009 compared with the same period in 2008, bringing it down to $1.9 billion from $3.2 billion last year.
Benaissa told the Reuters news agency that Algeria aims to become self-sufficient in wheat by offering incentives to local farmers. "We have implemented a plan to spend 200 billion Algerian dinars in agricultural subsidies per year from 2009 to 2014," he said. "Subsidizing strategic crops such as grains, milk, tomatoes and potatoes is one of our top priorities in the next five years."
The government also announced price controls in February, in a move designed to hold back inflation, currently at 5.7%, with much higher increases for some food items which have triggered unrest and strikes. "Officials blame ‘speculators’ for driving up prices while independent economists say the inflation is driven by heavy state spending and the fact that many parts of the food chain are controlled by monopolies," a Reuters report said. The price of flour is already controlled.
At the end of January, Algeria bought at least 500,000 tonnes of milling wheat for shipment in March and April, according to European traders quoted by Reuters. OAIC does not publish details of its grain purchases, the agency said, but it put Algerian purchases at typically around 350,000 tonnes a month. The traders reckoned the wheat was likely to come from France.
FRANCE A BIG SUPPLIER
Mann put Algeria in the top six of world wheat importers, with France the main supplier of bread-making wheat. The most recent annual report from the USDA attaché includes a table of the sources of wheat imports in 2008, which puts France well in the lead, with 2.853 million tonnes of the overall total of 6.351 million. Of the French total, 270,000 tonnes is durum, and the second and third sources on the list, Canada with 804,000 tonnes and Mexico with 832,000, both sold only durum to Algeria.
Germany is a big source for common wheat imports, providing 441,000 tonnes in 2008. The U.S. sent 288,000 tonnes. "Algeria’s wheat imports from the U.S. declined sharply in 2008 due to strong competition from wheat exporters from Europe and the Black Sea region," the report noted. Lithuania and Ukraine are both down as big sources, while the U.K. managed to get in 83,000 tonnes.
Despite a big need for grain, Algeria is strict about import standards. "Phytosanitary inspections are rigorous and preshipment fumigation is recommended," said Mann.
The USDA outlined the policy changes Algeria has made. "Algeria’s new agricultural development strategy places special emphasis on improving food production and quality," it said. "It more explicitly calls for the intensification of agricultural production (cereals, potatoes, olive oil, milk, meat and poultry), the revitalization of natural resources and improved usage of water resources and land."
It explained that an agricultural act passed in August 2008 provided a framework for protecting agricultural land and the security of farmers. The government decided in 2008 to subsidize the crop. "The Office of Cereals cooperatives will buy durum from farmers at 4,500 Algerian dinar (AD), or $63, per quintal (100 kilograms), bread wheat at 3,500 AD ($49) per quintal and barley at 2,500 AD ($35) based upon an exchange rate of $1 per 71 AD," it said. "In July 2008, the Algerian government issued a decree providing incentives to farmers, feed manufacturers and livestock producers to encourage local production. The farmers’ incentives include an exemption from valued added tax (VAT) until December 2009 for some agricultural inputs such as fertilizers, insecticides, herbicides and some feed grains as corn, soybean meal and alfalfa destined for feed manufacturers."
"However, U.S. exports of feedstuffs are expected to experience stiff competition from Argentinean suppliers," it said. It also noted that some shipments of distillers dried grains had entered Algeria early in 2008. "This is a new product for Algerian feed millers and importers, but with technical assistance demand could grow further. Trials are being done in some regions with the expectation of increased usage."
In a report published in May 2009, the U.S. Grains Council (USGC) suggested that Algeria’s poultry sector could import 200,000 tonnes of DDGS. "The U.S. Grains Council is actively involved in promotional projects in Algeria to create and expand markets for U.S. feed grains and their co-products," it said, putting Algeria’s corn imports at 2 million tonnes in 2008, second only in the Mediterranean region to Egypt.
Quoting Kurt Shultz, USGC director in the Mediterranean and Africa region, it said that about 90% of the corn imported was used for poultry feed. The council had partnered with ONAB, the government-owned entity which is the largest poultry producer, to conduct feeding trials on the inclusion of DDGS in broiler diets. "The purpose of the trial was twofold," said Shultz, "first to introduce the product (DDGS) to the market; and the much larger picture is to reduce the duties to make it more competitive with other feed grains in the marketplace.
"Through confidence building and market education, the Algerian poultry industry is a place where we can expect to see immediate growth in U.S. DDGS imports," said Shultz.
According to the USDA attaché, Algeria imported an annual average of 180,000 tonnes of pulses each year in the four years ending in 2008, "mostly from Canada, China, Mexico, Argentina and Turkey. The most significant pulses are beans, lentils, chickpeas and beans for seeding."
The attaché described Algeria’s imports of rice as "very irregular."
"Private importers take opportunities when good prices occur to buy rice in small containers from different origins," it said.
Chris Lyddon is World Grain’s European editor. He may be contacted at: