Report Highlights:

According to the FAO, early prospects for Algeria's 2016 winter wheat and coarse grains crops are favorable benefiting from recent widespread precipitation in eastern Algeria. Meanwhile, large swaths of land normally planted to cereals in western Algeria have suffered drought conditions due to a lack of rainfall.

Executive Summary:

Early prospects for Algeria's 2016 winter wheat and coarse grain crops are favorable benefiting from recent widespread precipitation in eastern Algeria. Meanwhile, large swaths of land normally planted to cereals in western Algeria have suffered drought conditions due to a lack of rainfall.

Algerian Grain Agency (OAIC) reported more than 3.3 million hectares planted this season although plantings were stunted by a considerable dry spell that stretched into January. The drought primarily affected western regions of Algeria. Improved rainfall during the remainder of the season would partially mitigate the negative impact of early season dryness but is unlikely to a full production recovery, as reported by the Algerian Great Crop Institute (ITGC).

The MY2015/2016 grain harvest reached 4 MMT. The grain output was up 14.3 percent compared to the previous year at (3.5 MMT) despite unfavorable weather conditions that were well managed. The grain harvest reached 4 MMT of which bread wheat accounted for 1 percent of the total output.

As result to falling oil prices, the GOA implemented measures to reduce imports. Algeria is seeking to raise its grains production mostly durum production to about 7 MMT per year over 2015-2019 to reach self-sufficiency in durum wheat by 2019.

The GOA introduced import and export licensing, (Journal Officiel No 66 of December 9, 2015) on agricultural commodities and goods originating from the E.U, in order to benefit from the customs duty exemption and preferential tariffs. The list includes; durum wheat and bread wheat, barley, oats, corn, rice coarse grains as well as oilseeds along with live animals, meat, milk and cheese, eggs, crude vegetable oil, sugar and many more.

The OAIC has taken advantage of low commodity prices to replenish stocks in MY2015/2016. The OAIC continues to tender for bread wheat from European markets as reported by press news.

Production:

Plantings

Weather has been very unfavorable for winter grains in Algeria during the first half the 2016 season. After an early rain in September, precipitation was almost non-existent until the end of December throughout January. The OAIC reported more than 3.3 million hectares were planted this sowing season although plantings were stunted by a dry fall that stretched to January that mainly affected western region of Algeria. In Algeria, the biggest crop-producing region is in the eastern area, and conditions appear much better.

According to FAO reports, early prospects for the 2016 winter wheat and coarse grains crops eastern parts of Algeria maintain favorable crop prospects owing to timely and widespread precipitation, large swathes of land normally planted to cereals in western Algeria have been adversely affected by drought conditions.

The ITGC reported that for farmers, who sowed early in October-November, many plots showed signs of dryness and seedlings have yellowed and have dried. Those who sowed during December are entitled to good production since the recent precipitation will be very beneficial especially those in the region where seeds began to sprout. Improved rainfall during the remainder of the season would partly mitigate the negative impact of early seasonal dryness but would not probably lead to a full production recovery

The Ministry of Agriculture (MOA) bulletins (of March 14 to 20, 2016) indicates the crop development in major production areas: as for wheat; bolting to early swelling in the littoral and sub-littoral Center and end bolting to early swelling in the Eastern region of the littoral, bolting in the center High Plateaus, end tillering to early bolting in Eastern and Western region of the high plateaus region. Barley and oat reached bolting to heading in the three regions of the coastline and sub-littoral, to bolting in the center of the high plateaus, end of tillering to early bolting in the East and to swelling beginning of heading in the west high plateaus.

Wheat and Barley

Durum and barley are the primarily cereal planted, while bread wheat and oats follows. High temperatures are not conducive to growing bread wheat, for this reason Algeria has always planted fewer hectares of bread wheat than durum and barley and has always imported more bread wheat. Each year, about 3.3 million hectares are dedicated to cereal crops of which about 1.5 million hectares are planted with durum, 1 million hectare with barley, 600,000 hectares bread wheat and only 100,000 hectares for oat.

Barley is the second most important cereal and most important feed grain grown in Algeria. It is grown along the coastal plain and mountains, generally on marginal land with annual rainfall of about 20 inches.

The MY2015/2016 grain harvest reached 4 MMT. The grain output was up 14.3 percent compared to the one the year before (3.5 MMT) despite some unfavorable weather conditions that were well managed. The grain harvest reached 4 MMT of which bread wheat accounted for 1 percent of the total output.

Following the oil price drop, the GOA implemented measures to reduce imports. As stated by the OAIC, Algeria is seeking to raise its grain production mostly durum production to about 7 MMT per year over 2015-2019 to reach self-sufficiency in durum wheat by 2019. The GOA is boosting the output through improving irrigation by expanding areas irrigated to two million hectares by 2019; currently only 12 percent of the arable land is irrigated.

GOA also supports 50 percent of the cost irrigation equipment and greater use of fertilizers and certified seeds, increased specialized mechanization such as tractors, planters, and harvesters and combines harvesters as well as increase storage facilities by building new silos.

Production of wheat, barley and oat, which constitute the grain crop in Algeria, has during the last five years been higher than the ten year average of 2.97 million MT, but is still far short of the 8 million tons needed for domestic consumption.

Algeria cereal production comparison (in Million MT)

Average Production

(2000-2008)

Production

2009

Production

2010

Production

2011

Production

2012

Production

2013

Production

2014

Production

2015

2.97

6.12

4.56

4.25

5.13

4.91

3.50

4.0

Source: Ministry of Agriculture reports

Wheat

2014/2015

2015/2016

2016/2017

Market Begin Year

Jul 2014

Jul 2015

Jul 2016

Algeria

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

1700

1700

2100

2100

0

2100

Beginning Stocks

4676

4676

3768

3768

0

4399

Production

1900

1900

2700

2700

0

2700

MY Imports

7257

7257

7700

8181

0

7000

TY Imports

7257

7257

7700

8181

0

7000

TY Imp. from U.S.

135

135

0

168

0

160

Total Supply

13833

13833

14168

14649

0

14099

MY Exports

15

15

25

0

0

0

TY Exports

15

15

25

0

0

0

Feed and Residual

50

50

50

50

0

50

FSI Consumption

10000

10000

10200

10200

0

10200

Total Consumption

10050

10050

10250

10250

0

10250

Ending Stocks

3768

3768

3893

4399

0

3849

Total Distribution

13833

13833

14168

14649

0

14099

(1000 HA) ,(1000 MT)

Barley

2014/2015

2015/2016

2016/2017

Market Begin Year

Jul 2014

Jul 2015

Jul 2016

Algeria

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

800

800

1000

1000

0

1000

Beginning Stocks

1178

1178

1304

1304

0

1204

Production

1300

1300

1300

1300

0

1300

MY Imports

876

876

650

650

0

650

TY Imports

723

723

600

600

0

0

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

3354

3354

3254

3254

0

3154

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

1700

1700

1700

1700

0

1700

FSI Consumption

350

350

350

350

0

350

Total Consumption

2050

2050

2050

2050

0

2050

Ending Stocks

1304

1304

1204

1204

0

1104

Total Distribution

3354

3354

3254

3254

0

3154

(1000 HA) ,(1000 MT)

Consumption:

Algeria is a major consumer of cereals. Wheat is the major source of staple food and accounts for about 75 percent of the calories consumed. Cereal consumption has more than doubled in the past 50 years to 285 kg per capita. Algeria's total demand for cereals is about 8 MMT.

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 stagnant. Recently, there has not been any new investment in the sector and currently, about 430 mills are operational in Algeria.

Barley consumption is a function of weather-related pasture conditions—in general, better pastures conditions result in decreased demand for imports. 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. 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. Algeria's breweries consume small amounts of barley, generally imported from Europe.

Barley consumption is projected to remain relatively stable unless improved pasture conditions are available, this may slightly decrease the feed consumption.

Trade:

Cereals represent 38 percent of the Algeria's total food import bill (2015) and also the top food import.

Wheat:

Algeria total wheat imports over the last five marketing years look relatively stable. However, the OAIC has taken advantage of falling prices to replenish stocks in MY2015/2016 and is still tendering for bread wheat from European markets as reported by press news. According to analysts, the price of bread wheat had a record decline the past five months on the world grain market. This downward trend is likely to continue in the near future following the European stocks that are coming very important.

Algeria's total wheat imports in MY2015/2016 were estimated at 8 million MT (valued at $2.39 billion). Bread wheat represented about 80 percent of total wheat imported in 2015, while durum imports represented only 20 percent.

Algeria imported 6 to 7 MMT per annum of total wheat over the past five years of which bread wheat always represents 75 to 83 percent of the wheat imports. Algeria will continue to import wheat particularly, bread wheat as it plants less bread wheat than durum and as domestic production is still mostly weather driven and don't meet the demand yet despite the increase in yields due to the agricultural strategy.

Algeria total wheat imports by origin in (1000) MT and MY (Jul/Jun)

MY10

MY11

MY12

MY13

MY 14

MY15

France

5044

3933

4257

5132

3814

4389

Lithuania

-

-

136

-

-

405

Germany

26

49

76

188

560

123

Australia

-

-

-

115

-

Argentina

79

622

50

-

-

Canada

147

723

812

597

646

372

Poland

-

-

108

151

486

324

Mexico

35

487

189

422

930

804

US

81

199

276

165

108

168

Uruguay

78

307

-

-

-

Ukraine

-

9

-

4

38

204

Leetonia

-

-

192

57

-

756

Brazil

675

78

53

-

-

Spain

24

13

3

-

-

Sweden

-

-

61

-

322

276

Great Britain

24

107

-

26

262

Yugoslavia

-

-

-

25

-

Italy

52

47

47

-

-

Estonia

300

Others

36

19

37

40

112

60

Total

6301

6593

6297

6922

7278

8181

Source: Algerian Official Trade Data

France remains the major wheat supplier to Algeria representing 54 percent of the MY2015 imports mostly bread wheat. Algeria imports durum from Canada, Mexico, and U.S.

as well as France respectively, while bread wheat imports originate respectively mainly from France and Germany. U.S. origin total wheat imports are irregular and 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.

Barley:

Algeria's barley imports are weather-driven—better weather results in higher local barley production and better pasture conditions, both of which decrease import demand. Barley imports increase when pasture shortages result from drought conditions.

Imports have fluctuated over the past several years according to the crop production. Barley imports increased following an average crop in MY2013/2014 and as the crop were revised downward in MY2014/2015; more barley was imported to meet the demand for animal feed. European and Black Sea countries are the main suppliers and export mostly in small shipments

Algeria barley imports by origin comparison in 1000 MT and MY (Jul/Jun)

MY11

MY12

MY13

MY14

MY15

Argentina

128

78

29

41

22

France

64

98

127

208

102

Russia

87

0

52

167

132

Ukraine

24

26

25

70

228

Leetonia

0

26

28

0

0

U.S.

0

0

0

0

0

Poland

0

24

0

29

0

Great Britain

0

0

127

164

48

Germany

24

81

76

0

0

Romania

0

0

0

79

108

Denmark

24

0

0

0

0

Bulgaria

0

0

0

40

0

Estonia

0

0

0

28

0

Others

0

0

64

60

10

Total

351

333

528

886

650

Corn:

Demand from the dairy and beef sectors as well as increased modernization efforts in the sector has driven increase in corn imports in the last five years following the government priority to develop this sector.

Corn imports in MY2015/2016 were mainly carried out by private sector (90 percent) of the total and the rest is covered by the Feed Grain Agency (ONAB).

U.S. origin corn competes with cheaper Argentine corn (since 2008). Trade contacts attribute this to price, competition from Black Sea suppliers as well as Algeria's preference for certain qualitative aspects and specifications of Argentine corn. U.S. exports resumed again in MY2010 but are irregular. U.S. exports represented 4 percent of MY2015 imports.

The U.S. feed industry has to engage in technical trade servicing to address misperceptions about U.S. feed quality.

Algeria corn imports by origin comparison in 1000 MT and MY (Jul/Jun)

MY10

MY11

MY12

MY13

MY14

MY15

Argentina

1135

1737

2500

2002

3167

2700

Ukraine

89

360

96

161

194

100

Brazil

251

590

182

1286

668

1007

Paraguay

39

48

0

0

-

147

Yugoslavia

6

34

21

0

-

-

Hungary

0

37

6

0

-

-

Romania

0

93

16

75

-

-

Uruguay

0

0

25

22

-

-

France

0

104

0

3

-

-

US

45

0

0

76

-

163

Bulgaria

0

36

0

82

-

-

Others

0

16

22

0

-

-

Total

1565

3055

2868

3707

4108

4117

Source: Algerian Official Trade Data

The new agricultural strategy which encourages domestic agricultural production renewed interest in domestic corn production for many farmers and non-farmers. Corn is now produced in some the southern provinces where average yields ranges from 13 to 80 quintals per ha. But technical issues related mainly to crop management, irrigation and harvest equipment still hamper the production of this feed locally.

Soybean Meal:

Demand for soybean meal comes mainly from the poultry feed industry. However, U.S. soybean meal imports declined — similar to corn—due to a lack of price competitiveness and consumer's preference for certain Argentine qualitative aspects and specifications. Argentine exports represent 89 percent of the imports and is the major soybean meal supplier.

Algeria soybean meals imports by origin comparison in 1000 MT

CY09

CY010

CY11

CY12

CY13

CY14

CY15

Argentina

702

929

1075

836

1182

1286

1266

U.S.

0

0

17

17

14

11

31

Brazil

4

0

0

0

16

31

51

Spain

8

15

10

8

6

3

7

Portugal

2

0

0

0

0

3

0

Germany

0

9

14

0

0

0

0

Paraguay

0

0

0

0

17

98

66

Switzerland

0

0

0

0

8

0

0

Total

716

953

1116

861

1243

1432

1421

Source: Algerian Official Trade Data

DDGS:

According to the U.S. Grains Council, 1368 MT were imported in CY2013 and 5328 MT in CY2014.

Rice:

Algerian imports of rice are very irregular but have increased since 2006 with the exception of CY2009 when imports decreased due to high prices on the market. With the evolution of the population, Algerian consumers have introduced more rice in their food ration. Private importers take opportunities when good prices occur to buy rice in small containers from different origins but mostly from Vietnam and Thailand. There were no imports from the U.S. in 2014. U.S. rice exports were 4 percent of the market in CY2012. U.S. prices are not competitive with Asian market.

Algeria rice imports by origin comparison in MT

Origin

CY2011

CY12

CY13

CY14

CY15

India

1423

46552

39704

41600

46083

Vietnam

37428

45775

67996

26975

30130

Pakistan

7572

4464

1481

7099

7033

U.S.

48

4192

7

0

3

Thailand

33968

2817

1598

29290

18190

Spain

1578

2278

2186

1261

1521

Uruguay

-

2016

4107

4080

0

Brazil

448

200

300

575

210

Tajikistan

3625

101

1000

6044

8333

China

30

19

138

45

27

Argentina

-

-

-

-

1999

France

-

-

-

-

97

Others

327

252

568

343

233

Total

86447

108666

119085

117312

113859

Source: Official Algerian Trade Data

Pulses:

Algeria imported an average of 222,000 MT of pulses per year over the past five years mostly from Canada, China, Mexico, Argentina, and Turkey. These pulses are mostly beans, lentils, chickpeas and beans for seeding. U.S. pulse exports have trended upward for the past several years with potential for future growth depending on prices. U.S origin exports consisted mainly of chickpeas, lentils, beans, and peas.

Algeria pulses imports by origin comparison in MT

Origin

CY11

CY12

CY13

CY14

CY15

Canada

87247

50667

90341

72212

95417

Mexico

9356

48916

21078

23431

21240

Argentina

52382

46865

33014

7361

26066

India

41810

7256

76619

29352

29094

Egypt

15102

6286

14279

32144

38446

U.S.

8863

4747

7618

10640

4798

France

2509

2100

1419

1372

2005

New Zealand

1225

1833

2062

1330

1425

Turkey

1543

1748

1832

3532

2210

Russia

387

1131

4095

3680

2685

Australia

8478

1079

638

0

0

China

12054

1004

4856

759

198

Spain

0

1289

Kirghizstan

2380

0

Others

6881

2853

6274

3927

3421

Total

247837

176485

264125

192120

228294

Source: Official Algerian Trade Data

Stocks:

According to media reports, an additional grain storage facility will be constructed with foreign investment. A foreign company will add another grain silo to its holdings in Algeria by the end of this year and invest ($40 million) in a grain storage unit with 165,000 MT capacity.

As reported previously, the OAIC is committed to supporting building an additional 8.2 million quintals of storage capacity in 2012 and another additional 8.4 million quintals by 2019 in addition to the 39 ready grain storage silos that are under construction, to store durum, bread wheat and barley to increase grains storage capacities.

Policy:

The Government of Algeria decided recently to rationalize imports and reduce as far as possible their costs, in order to curb the impact of the sharp drop of the world crude oil prices on the economy's revenues, given that 97% of the latter come from oil exports. GOA introduced import and export licensing system (Journal Officiel No 66 of December 9, 2015) so far on agricultural commodities and goods originating from the EU, in order to benefit from the customs duties exemption and preferential tariffs. The list includes; durum wheat and bread wheat, barley, oats, corn, rice coarse grains as well as oilseeds along with live animals, meat, milk and cheese, eggs, crude vegetable oil, sugar and many more. This was meant to manage quotas and quantities to be imported. However, what is known is that the GoA has been moving to make it difficult to import even products that are not produced domestically and the ones that imports are very high and expensive to reduce its import bill. This measure will likely have the effect of slowing the pace of imports.

According to the Algeria Press Agency, official from Ministry of Agriculture mentioned that an additional list of agricultural products is being considered for import licensing, among others, such as meat, apples and beef. According to the same official, the principle is to offer products that Algeria has production potential that could allow it to reduce imports but the balance of market supply