Report Highlights: 

Conditions to date are favorable with grain production expected to be similar to last year’s level, assuming normal conditions for the remainder of the growing season.

Executive Summary: 

Planting was completed under fairly satisfactory conditions throughout the country. 

Preliminary figures indicate cereal area will be similar to last year’s area or about 3.3 million hectares. According to the Technical Institute for Field Crops (ITGC), durum and barley occupy 80 percent of the cereals area planted, while 20 percent are dedicated to bread wheat and oats. Farmers are increasingly using certified seed. 

According to FAO reports, January and February rainfall increased soil moisture and significantly improved grain development and prospects for a good crop. 

The latest figures from ITGC indicate that MY 2012/13 grain production totaled 5.13 million metric tons (MMT), of which 58 percent durum. Efforts to increase yields are proving effective. Agricultural irrigated land is expected to increase from 1.1 million hectares to 1.6 million hectares by 2014. 

OAIC plans to increase the nation’s grain storage capacity by 1 million tons to 6 MMT. 

CY2012 wheat imports totaled 6.29 MMT (of which 4.71 MMT was bread wheat and 1.58 MMT was durum)—a decline of about 15 percent from CY2011 imports of 7.45 MMT. 

Preliminary CNIS data indicate imports thus far in CY2013 (Jan-Feb) declined to 754,449 MT (of which 652,016 MT was bread wheat and 102,433 MT was durum), compared to the 923,219 MT Algeria imported during the same period last year. 

U.S. wheat exports have declined sharply along with the other commodities due to tight supplies and price. U.S. origin products face stiff competition from European suppliers on price and shipping flexibility. 

Production: 

Plantings 

Planting was completed under fairly satisfactory conditions throughout the country. Preliminary figures indicate the area planted—3.3 million hectares, including 160,000 hectares for the production of certified seeds—was similar to last year. Farmers are increasingly using certified seed. According to OAIC, certified seeds are used on about 50 percent of planted area. 

The government 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. 

According to the U.N.’s Food and Agricultural Organization (FAO), rainfall in January and February significantly improved soil moisture and grain development. FAO’s current production forecast is favorable. In general, rainfall has been adequate and additional showers in northern Algeria maintained abundant soil moisture. Ministry of Agriculture bulletins show good crop development in all major production areas: early heading in the Eastern region, full to late tillering in the central and Western regions of the coastline and sub-littoral regions, and full to late 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. Of a total of 8.4 million hectares of arable land, 3.3 million hectares are dedicated to cereals. 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. 

The latest figures from ITGC indicate that MY2012/13 grain production reached 5.13 million metric tons, of which 58 percent was durum. As previously reported , the Ministry of Agriculture (MoA) has revised its preliminary total grain production forecast from the 5.6 million metric tons (MMT) it announced in June 2012 to 5.13 MMT, due to extreme heat during July and August. Even so, the MY2012/2013 cereal crop is the second largest on record, behind the 6.12 MMT produced in MY2009/2010.

Government efforts to increase yields have proven effective. Cereal yields have increased from 0.8 MT/ha in the 1980’s to 1.2 MT/ha in 2000 to about 1.8 MT/ha in 2012. The OAIC reported the increase of use of certified seeds for all grains from 80,000 MT in 2008 to 141,000 MT in 2010 as well as the increased use of inputs (and especially fertilizers) is important factors in increasing yields. 

Since grain production is strongly correlated with rainfall—which is erratic— the development of irrigation and water resources remains an important priority. Agricultural irrigated land is expected to increase from the current level of 1.1 million hectares to 1.6 million hectares by 2014. Some areas in the south use pivot system for supplemental irrigation. 

Consumption: 

Algeria is a major consumer of cereals. Wheat is the staple food and 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. 

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. 

As previously reported, in January 2011, OAIC increased quotas supplied to mills from 50 to 60 percent of capacity as part of new measures to control consumer prices. OAIC increased quotas an additional 10 percent to 70 percent on the eve of Ramadan in anticipation of consumption increases. 

Barley is consumed largely for animal feed, with small quantities destined for human consumption. Consumption is projected to remain relatively stable, depending on pasture conditions. 

Trade: 

Cereals account for an important part of Algerian food imports, representing about 36 percent of the total food import bill in CY2012. 

Wheat: Recently released preliminary data from the Algerian Customs Information and Statistics Center (CNIS) indicates CY2012 wheat imports declined about 15 percent compared to CY2011. In CY2011 Algeria imported 7.45 million metric tons (MMT) of wheat, while in CY2012 purchases declined to 6.29 MMT, of which 4.71 MMT was bread wheat and 1.58 MMT was durum. In terms of value, Algeria’s expenditures for imported wheat decreased from $2.85 billion in CY2011 to about $2.11 billion in CY2012. Algeria’s grain buying agency OAIC began its CY 2012 wheat buying campaign earlier than usual in expectation of increasing international grain prices. 

Recent released CNIS preliminary show that wheat imports this far in CY2013 (Jan-Feb) of 754,449 MT (of which 652,016 MT was bread wheat and 102,433 MT was durum) are running about 18 percent below the 923,219 MT imported during the same period in CY 2012.

Major CY 2012 wheat suppliers to Algeria were France (51 percent), Canada (16 percent), Argentina (9 percent), and the United States (5 percent), followed by Uruguay, and Mexico. France is the major bread wheat supplier (62 percent), followed by Argentina (12 percent), Uruguay (6.5 percent), and the United States (5 percent). Canada is the leading durum supplier (64 percent), followed by France (17 percent), Mexico (12 percent), and the United States (5 percent).

U.S. origin wheat imports have declined sharply along with the other U.S. commodities due to tight supplies and price. U.S. origin products face stiff competition from European suppliers on price and shipping flexibility. 

Corn: Although total corn imports increased due to 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.

Barley: CY 2012 barley imports increased following an average crop. Imports have fluctuated over the past several years. As indicated below, European and Black Sea countries are the main suppliers and export mostly in small shipments.

Soybean Meal: Demand for soybean meal is mainly for poultry feed. As a result of the recent suspension of import duties and value-added taxes (VAT) on animal feed inputs and co-products, including soybean meal (see policy section), demand is expected to remain high. The figures in the table below show that total imports are increasing and reached 1.1 MMT in CY2011. 

Argentina is the major soybean meal supplier. U.S. soybean meal imports declined sharply— similar to corn—due to a lack of price competitiveness and Algeria’s preference for certain Argentine qualitative aspects and specifications.

DDG’s: Even though Algeria began importing dried distillers grains (DDGs) in 2008, it is still a new product for the market. Given increasing demand for protein meal and the suspension of duties and taxes, DDGs represent an important opportunity for U.S. suppliers, especially if they are willing to provide technical information and assistance and other trade servicing activities. 

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, Pakistan, and the United States. U.S. supplies have 

been erratic. In MY 2002, Algeria purchased 28,000 MT of U.S. rice, using GSM-102, under GSM-102 but have not approached that level since.

Pulses: Algeria imports an average of 200,000 MT of pulses annually, mainly from Canada, Mexico, Argentina, and India. The pulses consist mainly of beans, lentils, chickpeas, and beans for seeding. Algeria represents another opportunity for U.S suppliers. U.S. pulse exports have trended upward for the past several years with plenty of potential for future growth. U.S. pulse exports consist mainly of chickpeas, lentils, beans, and peas.

Stocks: 

Although domestic production is increasing, storage capacity is not, leading to concerns about the ability to store large volumes. Algeria has not invested in storage capacities since 1988. Consequently, last year OAIC announced plans to increase the nation’s grain storage capacity by 1 MMT to 6 MMT. 

Policy: 

Wheat production is a priority and the government continues to pursue production policies and program that support import substitution for wheat. 

In response to increasing international grain prices, 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. The GoA took this action 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 and for DDGS and CGF it was 30 percent and 17 percent respectively. As a result, it is expected that imports of U.S. feed grain and DDGS could increase. This suspension comes into force from September 1, 2012 through August 1, 2013, and could be extended, depending on results. 

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 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 in order to open the Algerian market to the benefits of increased trade with the United States