Report Highlights:

Excellent rain during the planting season contributed significantly to favorable MY2015/2016 wheat and coarse grain crop prospects as reported by the FAO. During MY2014/15, France retained its dominance as the top source for Algeria's wheat.

Executive Summary:

The area planted to grain was accompanied by excellent rain in the production areas. Grain plantings completed under fairly satisfactory conditions throughout the country. Durum and barley usually accounts for 80 percent of cereal area, while bread wheat and oats accounts for the remaining 20 percent. Abundant rain in January eliminated deficits in moisture that developed earlier at the beginning of the growing season, allowing satisfactory crop development in major production areas. Furthermore, indications are that farmers are planning more and more certified seeds along with certified fertilizer which may result in higher yields.

The Ministry of Agriculture's (MOA) final cereal production total in MY2014/15 was revised down 30 percent compared to the previous year. Total cereal production was 3.4 million MT, down from 4.91 million MT in 2012/13. Grain production is strongly correlated with rainfall—which is erratic— the development of irrigation and water resources remains an important priority. Currently, only 12 percent of the arable land is irrigated.

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.

Algeria has imported 6 to 7 MMT per annum of wheat over the past several years of which bread wheat 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 because domestic production is still mostly weather driven and does not meet domestic demand despite the increase in yields as a result of newly implemented agricultural initiatives.

In accordance with Algeria's 2015 finance law, VAT will be reduced to 7 percent for corn, soybean meal, DDGS, rice, bran, mineral & vitamin concentrates, and horses (Art23 of the 2015 Finance law). An exemption from duties has been applied to DDGS, soybean meal and other residues and mineral and vitamin concentrates starting effective September1, 2014 to December 31, 2015 (Art44 of the 2015 Finance law).

Production:

According to FAO reports, early prospects for wheat and coarse grains crops are favorable.

The crop is reported to be developing well. Excellent weather during the planting season for MY2015/2016 grain campaign suggests a favorable crop this year. Grain plantings were completed under fairly satisfactory conditions throughout the country. Abundant rain in January eliminated deficits in moisture that developed earlier in the beginning of the growing season, allowing satisfactory crop development in major production areas. The MOA bulletins indicates crop development in major production areas: as for wheat; full tillering in the Center region, tillering to early bolting in the Eastern and Western region of the coastline and sub-littoral regions, and full tillering to early bolting in the high plateaus for the three regions. Barley and oat reached full tillering to early bolting in the three regions of the coastline and sub-littoral, to bolting to early swelling on the high plataus.

Given current conditions, and if the weather is stable for the remainder of the growing season, production is expected to be favorable. To date, the MOA has not released any official preliminary figures yet to indicate the total plantings areas and projected yields for the new crop. But, usually, in the past years an average of 3.2 million hectares is always devoted to grains (durum, bread wheat, barley and oat). Durum always accounts for the biggest portion of the planted area followed by barley and bread wheat.

Wheat and Barley

Durum continues to account for the largest portion of planted area, followed by barley and bread wheat. According to the Technical Institute for Field Crops, durum and barley occupy 80 percent of cereal area, while bread wheat and oats occupy the remaining 20 percent. 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. Farmers plant barley in the fall (November) and harvest in late spring or early summer (May\June).

Indications are that farmers are planting certified seeds and fertilizers. Farmers expanded certified seed and input by 30 percent this year in response to government incentives; the MOA continues to provide economic and technical assistance and incentives in order to improve yields and quality. Assistance includes interest-free loans for seeds, irrigation, equipment, and other inputs.

Wheat, barley and oat production in Algeria during the last five years was higher than the ten year average of 2.97 million MT, but still far short of the 8 million tons needed for domestic consumption. MOA final statement, the Algeria's cereal production in MY2014/15 was revised down by 30% compared to the previous year. Total cereal production amounted to 3.4 million MT, down from 4.91 million MT in 2012/13. The drop was due to poor weather conditions, mainly due to the drought affected provinces in Eastern Algeria. This region supplies most domestic demand. MOA has still not provided any official details about soft bread and hard durum wheat production.

Since grain production is strongly correlated with rainfall—which is erratic— the development of irrigation and water resources remains a priority. Agriculture land under irrigated is expected to increase from the current level of 1.1 million hectares to 1.6 million hectares by 2015. Some areas in the south use pivot system for supplemental irrigation. Currently, only 12 percent of the arable land is irrigated.

Algeria cereals production comparison (in Million MT)

Average Production

(2000-2008)

Production

2009

Production

2010

Production

2011

Production

2012

Production

2013

Production

2014

2.97

6.12

4.56

4.25

5.13

4.91

3.40

Consumption:

Algeria is a major consumer of cereals. Wheat is the staple grain of food and accounts for about 75 percent of the calories consumed. According to recent MOA figures, per capita 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. OAIC, which both imports and buys domestic grains, is the main supplier to domestic processors. According to reports, OAIC supplies 100 percent the public sector's requirements and 60 percent of private processor requirements. On average, OAIC supplies 450,000 MT of bread wheat and 230,000 MT of durum per month.

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 stable. After the craze for investment in the milling industry many wheat and flour mills expanded after the opening of the market and privatization in 1998. Recently, there has not been any new investment in the sector and currently, about 430 mills are operational in Algeria.

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

Consumption is projected to remain relatively stable, depending on pasture conditions.

Trade:

Cereals account for an important part of Algerian food imports. They represent 31 to 36 percent of the total food import bill each year.

Wheat:

As domestic production is still mostly weather driven and does not meet domestic demand, Algeria continue to import wheat, bread wheat as it is planted fewer hectares than durum and barley. Algeria total wheat imports over the last four marketing years look relatively stable. Algeria imported 6 to 7MMT per annum of total wheat over the past years of which bread wheat represented 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 new MOA agricultural production strategy.

Algeria Total Wheat Imports

By Origin in (1000) MT and MY (Jul/Jun)

MY2010

MY2011

MY2012

MY2013

MY 2014

France

5044

3933

4257

5132

3814

Lithuania

-

-

136

-

-

Germany

26

49

76

188

560

Australia

-

-

-

115

-

Argentina

79

622

50

-

-

Canada

147

723

812

597

646

Poland

-

-

108

151

486

Mexico

35

487

189

422

930

US

81

199

276

165

108

Uruguay

78

307

-

-

-

Ukraine

-

9

-

4

38

Leetonia

-

-

192

57

-

Brazil

675

78

53

-

-

Spain

24

13

3

-

-

Sweden

-

-

61

-

322

Great Britain

24

107

-

26

262

Yugoslavia

-

-

-

25

-

Italy

52

47

47

-

-

Others

36

19

37

40

112

Total

6301

6593

6297

6922

7278

France remained the major wheat supplier to Algeria representing 52 percent of the MY2014 imports despite the weather damaged crop of MY14/15. In good years, France supplies 75 to 80 percent of the bread wheat and 59 percent of durum. In CY2014 French wheat imports represented 60 percent of imported wheat. U.S. origin total wheat imports 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.

The table below highlights the fluctuation of imports over the past several years. Barley imports increased following an average crop in the MY2013/2014. As reported above, the crop was average and revised downward; more barley was imported in MY2014/2015 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

Argentina

128

78

29

France

64

98

127

213

Russia

87

0

52

Ukraine

24

26

25

70

Leetonia

0

26

28

U.S.

0

Poland

0

24

Great Britain

0

127

196

Germany

24

81

76

Romania

79

Denmark

24

0

Bulgaria

40

Estonia

28

Others

0

0

64

-

Total

351

333

528

626

Corn:

The government efforts to develop the agriculture sector and improve the dairy sector generates increased demand from the dairy and beef sectors which drives the demand for corn imports higher. A movement toward increased modernization in the sector is taking root. Industry sources indicated this could help U.S. origin corn prospects.

U.S. exports resumed after a long departure from the market. This void was filled by Argentina, which has been the leading corn supplier since 2008. U.S. exports represented 2 percent of MY13 imports. Trade contacts attribute this decline in U.S. corn exports to Algeria to price, competition from Black Sea suppliers, and Algeria's preference for certain quality aspects and specifications of Argentine corn. The U.S. feed industry should seize this opportunity by engaging 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)

MY11

MY12

MY13

MY14

Argentina

1737

2500

2002

3167

Ukraine

360

96

161

194

Brazil

590

182

1286

668

Paraguay

48

0

0

-

Yugoslavia

34

21

0

-

Hungary

37

6

0

-

Romania

93

16

75

-

Uruguay

0

25

22

-

France

104

0

3

-

US

0

0

76

-

Bulgaria

36

0

82

-

Others

16

22

0

-

Total

3055

2868

3707

4108

The new agricultural strategy to encourage 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 is mainly from poultry feed industry. As a result of the suspension of import duties and VAT on animal feed inputs and co-products, including soybean meal, demand remained high and imports increased as shown in the table below; imports figures reached 1.43 Million MT in CY2014. 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 90 percent of the imports and is the major soybean meal supplier.

Algeria Soybean Meals Imports by Origin

Comparison in 1000 MT

CY11

CY12

CY13

CY14

Argentina

1075

836

1182

1286

U.S.

17

17

14

11

Brazil

0

0

16

31

Spain

10

8

6

3

Portugal

0

0

0

3

Germany

14

0

0

0

Paraguay

0

0

17

98

Switzerland

0

0

8

0

Total

1116

861

1243

1432

DDGS:

U.S. exports of DDGS to Algeria began in 2008 for feeding trials conducted in some regions with the expectation of increased usage by poultry and livestock farmers. U.S. Grains Council reports show 1368 MT were imported in CY2013 and 5328 MT in CY2014.

Rice:

Algeria's rice imports are very irregular but have increased with changing dietary habits. Private importers buy small containers when prices appear competitive, mainly from India, Vietnam, and Thailand. There were no imports from the U.S. in 2014. U.S. rice exports were 11 percent of the market in CY 2010 and 4 percent in CY2012.

Algeria Rice Imports

Five Years Comparison (In MT)

Origin

CY2011

CY12

CY13

CY14

India

1423

46552

39704

41600

Vietnam

37428

45775

67996

26975

Pakistan

7572

4464

1481

7099

U.S.

48

4192

7

0

Thailand

33968

2817

1598

29290

Spain

1578

2278

2186

1261

Uruguay

-

2016

4107

4080

Brazil

448

200

300

575

Tajikistan

3625

101

1000

6044

China

30

19

138

45

Others

327

252

568

343

Total

86447

108666

119085

117312

Pulses:

U.S. pulse exports have trended upward for the past several years with plenty of potential for future growth. U.S. shared 6 percent of the pulses market in CY2014 and exports consist mainly of chickpeas, lentils, beans, and peas.

Algeria Pulses Five Years Imports by Origin

Comparison in MT

Origin

CY11

CY12

CY13

CY14

Canada

87247

50667

90341

72212

Mexico

9356

48916

21078

23431

Argentina

52382

46865

33014

7361

India

41810

7256

76619

29352

Egypt

15102

6286

14279

32144

U.S.

8863

4747

7618

10640

France

2509

2100

1419

1372

New Zealand

1225

1833

2062

1330

Turkey

1543

1748

1832

3532

Russia

387

1131

4095

3680

Australia

8478

1079

638

0

China

12054

1004

4856

759

Kirghizstan

2380

Others

6881

2853

6274

3927

Total

247837

176485

264125

192120

Stocks:

Algeria has not invested in storage facilities since 1988. The Algerian grain agency (OAIC) has been tendering for the past few years for the construction of 39 ready grain storage silos (nine reinforced concrete silos and 30 metal silos) to store durum, bread wheat and barley to increase grains storage capacities; OAIC committed to supporting building an additional 8.2 million quintals of storage capacity in 2012 and another additional 8.4 million quintals by 2019.

Policy:

In accordance with Algeria's 2015 finance law, VAT will be reduced to 7 percent for corn, soybean meal, DDGS, rice, bran, mineral & vitamin concentrates, and horses (Art23 of the 2015 Finance law). An exemption from duties has been applied to DDGS, soybean meal and other residues and mineral and vitamin concentrates starting effective September1, 2014 to December 31, 2015 (Art44 of the 2015 Finance law).

As for feed inputs, import duties and VAT are applied to corn (5 percent and 7 percent), soybean meal (0 percent and 7percent), DDGS (0 percent and 7 percent). In spite of the imposition of VAT, post analysis is this is still favorable for imports, as demand is high which portends well for imports.

In 2012, the GoA suspended import duties and VAT on animal feed inputs and co-products, including corn, dried distiller's grains with solubles, DDGS, and CGF as well as soybean meal. This initiative was in response to high international grain prices as a means to curb inflation by moderating expected increases the price of animal products, particularly meat and poultry. This exemption was extended under the 2014 finance law (art44) to August 31, 2014. Previously, the import duty and VAT for corn was 5 percent and 7 percent, soybean meal 5 percent and 17 percent and for DDGS and CGF it was 30 percent and 17 percent respectively.

Marketing:

FAS Cooperators in the region are working with the Algerian millers, importers, feed manufacturers, poultry and dairy cattle farmers to provide technical assistance to promote the quality and reliability of U.S. commodities in order to expand the U.S. share in this market. The US Wheat Associates, through their office in Casablanca, Morocco, the US Grains Council in Tunis and the American Soybean Association, are currently engaged in various market development activities in Algeria. These activities, which include technical workshops, seminars, trade missions, and technical exchange programs in the United States are need to open the Algerian market to the benefits of increased trade with the United States.

Production, Supply and Demand Data Statistics:

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

Jul 2015

Algeria

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

1,727

2,000

1,700

1,700

0

1,900

Beginning Stocks

3,762

3,762

4,673

4,673

0

3,801

Production

3,302

3,302

1,900

1,900

0

2,500

MY Imports

7,484

7,484

7,100

7,278

0

7,200

TY Imports

7,484

7,484

7,100

7,278

0

7,200

TY Imp. from U.S.

110

110

0

54

0

100

Total Supply

14,548

14,548

13,673

13,851

0

13,501

MY Exports

25

25

25

0

0

0

TY Exports

25

25

25

0

0

0

Feed and Residual

50

50

50

50

0

50

FSI Consumption

9,800

9,800

10,000

10,000

0

10,000

Total Consumption

9,850

9,850

10,050

10,050

0

10,050

Ending Stocks

4,673

4,673

3,598

3,801

0

3,451

Total Distribution

14,548

14,548

13,673

13,851

0

13,501

Yield

1.9120

1.6510

1.1176

1.1176

0.0000

1.3158

TS=TD

0

0

0

0

0

0

Barley

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

Jul 2015

Algeria

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

900

0

800

800

0

900

Beginning Stocks

1,194

1,194

1,194

1,194

0

1,070

Production

1,500

1,500

1,300

1,300

0

1,500

MY Imports

550

550

600

626

0

600

TY Imports

700

700

600

600

0

600

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

3,244

3,244

3,094

3,120

0

3,170

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

1,700

1,700

1,700

1,700

0

1,700

FSI Consumption

350

350

350

350

0

350

Total Consumption

2,050

2,050

2,050

2,050

0

2,050

Ending Stocks

1,194

1,194

1,044

1,070

0

1,120

Total Distribution

3,244

3,244

3,094

3,120

0

3,170

Yield

1.6667

0.0000

1.6250

1.6250

0.0000

1.6667

TS=TD

0

0

0

0

0

0