Algeria has recently purchased between 600,000 and 800,000 metric tons of wheat through an international invitation to tender, according to estimates by European traders as reported by Reuters. This comes on the backdrop of the Ukraine war that leaves grain-importing countries in a pickle.
The deal, which closed on 31 July, was made public in early August.
The purchase was made by the Office Algérien Interprofessionnel des Céréales (OAIC), the public body responsible for importing wheat consumed in Algeria.
The deal follows several other purchases made at the start of the year (1.5m tons), estimated between 500,000 and 600,000 tons in May and around 400,000 tons in June.
Romania, Bulgaria, Australia
While the OAIC is neither disclosing the volumes nor the origin of the wheat, traders have indicated that the latest supplies have mainly come from Russia.
In mid-July, Moscow withdrew from the Black Sea grain initiative, allowing Ukrainian grain to be exported despite the conflict between the two countries. It has a large stock of wheat thanks to a good harvest in 2022 and rising production in recent years.
Other suppliers to Algiers include Romania and Bulgaria in the Black Sea region, as well as Australia and South American countries.
A major consumer of wheat – around 12m tons a year – Algeria is struggling to develop its own production, forcing the drought-stricken country to import this cereal on a massive scale.
Today Algeria is the second largest importer on the African continent after Egypt.
Algerian production struggling
The annual harvest is struggling to exceed four million tons. This is despite the government’s determination to develop production by increasing yields to 30 quintals per hectare – a target set by President Abdelmadjid Tebboune at the beginning of the year.
Estimated at 2.5m tons in 2021-2022, Algerian wheat production rose to 3.3m tons in 2022-2023, but should fall back to 2.7m tons in 2023-2024, according to the US Department of Agriculture (USDA).
The decline is caused by low rainfall and high temperatures since the start of the year.
Algeria continues to buy large volumes of wheat to consolidate its reserves
The North African country, which imported eight million tons of wheat in 2021-2022 and 7.5m tons in 2022-2023, is expected to bring in 8.7m tons from abroad in 2023-2024. This is more than the lastest peak of 8.4m tons, which was reached in 2016-2017, again according to the USDA data.
“Algeria continues to buy large volumes of wheat to consolidate its reserves,” USDA said in a bulletin published in mid-July, confirming that most of this was soft wheat (used to make bread) from Russia.
Although France has historically been a top supplier to Algeria, a turning point was reached in 2020, a year of poor harvests in France.
That same year, Algeria turned to Russia and Eastern Europe, both to reduce its dependence on French cereals and to diversify its suppliers.
Since then, as supply difficulties have become increasingly acute due to the war in Ukraine, Algiers’ strategy has led to growing competition between France and Russia for soft wheat exports.
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