Report Highlights:

The planting season was boosted by exceptional rainfall throughout the country that followed a drought that stretched to November in some central and western areas. Ministry of Agriculture reports a 12 percent increase in the planting area compared to last year.

The animal feed inputs and co-products exemption from duties and VAT that was decided in September 2012 was extended to August 31, 2014 only, and during this period, exemption would be granted under specifications established by ministry of agriculture.

Executive Summary:

Sowing of the MY 2014/15 winter wheat and coarse grain crops benefited from favorable rain precipitation and was boosted by exceptional rainfall throughout the country that followed a drought that stretched to November in some central and western areas. 

Ministry of Agriculture reported back in December a 12 percent increase in the planting area compared to last year (3.3 million ha). As of December 5, 2013, 1.188 million hectares (Ha) were planted. 

Farmers expanded certified seeds and input usage in response to government incentives; the Ministry of Agriculture (MOA) continues to provide economic and technical assistance and incentives in order to improve yields and quality. 

In general, rainfall has been adequate in the last four months and maintained good soil moisture which helps crop development. Given current conditions, and assuming normal conditions for the remainder of the growing season, production is expected be similar to last year. 

As previously reported, the Ministry of Agriculture (MoA) has revised its preliminary total MY 2013/14 wheat and coarse grain production downward to 4.91 million MT as drought affected some of the main growing areas in the Eastern part of the country and harvested area totaled 2.712 million ha. Durum wheat represented 47.5 percent of total production totaling 2.332 million MT. Bread wheat totaled 0.970 million MT and barley 1.498 million MT. Oat production consisted only of 0.113 million MT. 

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. 

Algeria total wheat imports over the last four marketing years look relatively stable. 

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 does not meet demand. 

The Grain agency OAIC committed to supporting building an additional 0.82 million tons of storage capacity in 2012 and another additional 0.84 million tons by 2019, to increase grains storage capacities for durum, bread wheat and barley. 

The exemption from duties and VAT on animal feed inputs and co-products, including corn, dried distiller’s grains with soluble (DDGS), and corn gluten feed (CGF) as well as soybean meal that was decided in 2012, in response to increasing international feed prices, is extended part of the finance law for year 2014 (Art 44) from September 1st, 2012 to August 31, 2014 and nonrenewable. And this exemption would be granted only under specifications established by the Ministry of Agriculture. 

Production:

Plantings 

Sowing of the MY 2014/15 winter wheat and coarse grain crops benefited from favorable rain precipitation and was boosted by exceptional rainfall throughout the country that followed a drought that stretched to November in some central and western areas. This rainfall improved soil moisture and benefited crop establishment which helped encourage plantings. 

So far, Ministry of Agriculture has not released any official preliminary figures yet to indicate the total plantings areas and projected yields for the new crop. But usually in past years (2001-2009), an average of 3.2 million hectares was devoted to grains (durum, bread wheat, barley and oat). This past December however, the Ministry of Agriculture reported a 12 percent increase in the planting area compared to last year (3.3 million ha). As of December 5, 2013, 1.188 million hectares (Ha) were planted. 

Farmers expanded certified seeds and input usage in response to government incentives; the Ministry of Agriculture (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. 

In general, rainfall has been adequate in the last four months and maintained good soil moisture which helps crop development. Ministry of Agriculture bulletins show crop development in major production areas: early and late tillering in the Eastern region, early tillering in the Central and Western regions of the coastline and sub-littoral regions, and early to full tillering in the high plateaus. 

Given current conditions, and assuming normal conditions for the remainder of the growing season, production is expected to be similar to last year. 

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 (ITGC), 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 it in late spring or early summer (May\June). Traditionally, farmers follow a barley-fallow rotation. 

As previously reported, the Ministry of Agriculture (MoA) has revised its preliminary total MY 2013/14 wheat and coarse grain production downward to 4.91 million MT as drought affected some of the main growing areas in the Eastern part of the country and harvested area totaled 2.712 million ha. Durum wheat represented 47.5 percent of total production totaling 2.332 million MT. Bread wheat totaled 0.970 million MT and barley 1.498 million MT. Oat production consisted only of 0.113 million MT.

Government efforts to increase yields have proven effective. OAIC report show both cereal yields for all grains and use of certified seeds and inputs have increased. Yields increased from 0.8 MT/ha in the 1980’s to 1.1 MT/ha in 2000 to about 1.81 MT/ha in 2013, with peaks reaching 7.1 T/ha. Certified seeds and the use of inputs (especially fertilizers) increased and are significant factors in increasing yields. 

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.

Consumption:

Algeria is a major consumer of cereals which remains a staple food for the population. Wheat accounts for about 75 percent of the calories consumed. According to recent Ministry of Agriculture figures, per capita cereal consumption has more than doubled in the past 50 years to 285 kg per capita which is eaten mainly in the form of bread and couscous made from semolina. 

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 and many wheat and flour mills expanded after the opening of the market and privatization in 1997, no more new investment was done in the sector and currently, about 430 mills are operational over the country. 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. 

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 barley. 

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 as part of the policy to improve domestic production and reduce imports of some other expensive feed grains. 

Farmers either feed barley on-farm or sell it to OAIC, which in turns sells it to domestic consumers, including livestock producers and public and private feed mills at the set price of AD 15,000/MT. 

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

Trade:

Cereals have always accounted for an important part of Algerian food imports and account for 31 to 36 percent of the total food import bill each year.

Wheat:

Algeria total wheat imports over the last four marketing years look relatively stable. Algeria has been importing 6 million MT more or less total wheat of which 75 to 83 percent represented bread wheat, in part due to the relative stability of the wheat consumption over the last years. The Algerian agricultural strategy to improve domestic production and reduce imports has also proven effective; crops yields have increased compared to the period (2000-2008). However, 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 does not meet demand.

France remains the major supplier to Algeria with 75 percent of the market, followed by Germany and Canada. 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. 

The United States shares only 1 percent of the bread wheat imports but 13 percent of the durum market. France is the major bread wheat supplier (86 percent), followed by Germany (4 percent). Canada is the leading durum supplier (59 percent), followed by France (18 percent), and the United States (13 percent). 

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. The opposite also is true as occurred during the drought in 2008. Increasing herd size and increased use of grain in rations increases demand and may also increase imports. 

Imports have fluctuated over the past several years. Following the good crop recorded in 2009 and thus the availability of good stocks and pasture, little barley was imported in 2010. 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 MY2013/2014 to meet the demand for animal feed. European and Black Sea countries are the main suppliers and export mostly in small shipments.

Corn:

Although total corn imports increased due to the tax and VAT exemption as well as increased demand from the dairy and beef sectors, U.S. exports continued to decline in competition with Argentina, which has been the leading corn supplier since 2008. Trade contacts attribute the sharp decline in U.S. corn exports to Algeria to price, competition from Black Sea suppliers, and Algeria’s preference for certain qualitative aspects and specifications of Argentine corn. U.S. feed industry needs to engage effectively in technical trade servicing and activities to address some of the apparent misperceptions surrounding U.S. feed products quality.

Soybean Meal:

Demand for soybean meal comes mainly from poultry feed. As a result of the suspension of import duties and value-added taxes (VAT) on animal feed inputs and co-products, including soybean meal, demand was high and imports increased; imports figures reached 1.24 Million MT in CY2013. 

However, U.S. soybean meal imports declined still— similar to corn—due to a lack of price competitiveness and consumer’s preference for certain Argentine qualitative aspects and specifications. Argentina shares 95 percent of the imports and is the major soybean meal supplier.

DDG’s:

According to feed industry source, given increasing demand for protein meal and the suspension of duties and taxes for this product, some DDGs were imported beginning of this year. This represents an important opportunity for U.S. suppliers. As reported previously, Algeria began importing dried distillers grains (DDGs) in 2008 for testing. 

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, Uruguay, Spain and Thailand. U.S. shared 11 percent of the market in CY 2010 and 4 percent in CY2012.

Pulses:

U.S. pulse exports have trended upward for the past several years with plenty of potential for future growth. U.S. shares 3 percent of the pulses market and exports consist mainly of chickpeas, lentils, beans, and peas.

Stocks:

Algeria has not invested in storage capacities 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) in the country for durum, bread wheat and barley to increase grains storage capacities; OAIC committed to supporting building an additional 0.82 million tons of storage capacity in 2012 and another additional 0.84 million tons by 2019.

Policy:

According to the finance law for year 2014 (Art 44), the exemption from duties and VAT on animal feed inputs and co-products, including corn, dried distiller’s grains with soluble (DDGS), and corn gluten feed (CGF) as well as soybean meal, is extended from September 1rst, 2012 to August 31, 2014 and nonrenewable. And this exemption would be granted only under specifications established by the Ministry of Agriculture.

To recall, 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 corn gluten feed (CGF) as well as soybean meal in response to increasing international grain prices to curb inflation by moderating expected increases the price of animal products, particularly meat and poultry. Previously, the import duty and VAT for corn was 5 percent and 7 percent, soybean meal 5percent and 17percent 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 engaged in various market development activities in the Algerian market. These activities, which include technical workshops and seminars, trade missions and technical exchange programs in the United States, need to be more effective and address some of the apparent misperceptions surrounding U.S. products particularly U.S. feed products quality in order to open the market and increase trade