Highlights

Algeria's 2017 Finance law increases value added tax for many products and will decrease imports of barley, corn, soybean meal, rice, oat, sorghum and DDGs. The increase became effective January 1, 2017.

Crop Update

The decline in rainfall and the increase in temperatures in October and November affected many sectors related to agriculture and particularly, cereal farmers who are in rainfall dependent regions. Only about 20 percent of normal rainfall fell in September and October 2016. The lack of precipitation coupled with above-average temperatures, depleted the soil moisture necessary for winter crop planting. Some areas in western and central Algeria suffered from short-term drought. Climatic conditions in Algeria have changed since the beginning of January 2017. Nearly every region has received rain and or snow which hopefully will relieve farmers' concerns and mitigate the negative impact of early season dry conditions.

Policy update

The FY2017 Finance Law increased VAT rates as part of the new fiscal measures for 2017. The current rate will increase from 7% to 9%, and the standard rate from 17% to 19%. The new rates became effective January 1, 2017. The 9% rate applies to about 80 products of which some are grain and feed products such as barley, oats, corn, rice, sorghum, mills by-products (malt, starch, gluten), pasta, couscous, as well as soybean meal, and DDGs. Also included are others residues, soybean flour defatted, and mineral vitamin and/or nitrogen concentrate. According to an Algerian Press Service news release, the Directorate-General of Taxes reports that this change in rates "has no direct impact" on the sales price of dozens of products such as bread, bread flour, milk, medicines, sugar, soy-based oil, fruit and vegetables excluding imported products. As for products not exempt from VAT, the impact on the price is 2%. The increase in VAT will likely have the effect of slowing the pace of imports of many products. Wheat is not on the list of products to be affected by the increase as it remains exempted from VAT.

The increase in VAT for affected products is part and parcel of Algeria's desire to reduce imports. Whether the government's new VAT regime will have the intended effect is unknown.

Wheat

2015/2016

2016/2017

2017/2018

Market Begin

Jul 2015

Jul 2016

Jul 2017

Algeria

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

2100

2100

1300

1300

0

2100

Beginning Stocks

3768

3768

4357

4357

0

4292

Production

2700

2700

2000

2000

0

2700

MY Imports

8153

8153

8200

8200

0

8000

TY Imports

8153

8153

8200

8200

0

8000

TY Imp. from

69

69

0

0

0

60

Total Supply

14621

14621

14557

14557

0

14992

MY Exports

14

14

15

15

0

0

TY Exports

14

14

15

15

0

0

Feed and Residual

50

50

50

50

0

50

FSI Consumption

10200

10200

10400

10200

0

10200

Total Consumption

10250

10250

10450

10250

0

10250

Ending Stocks

4357

4357

4092

4292

0

4742

Total

14621

14621

14557

14557

0

14992

Barley

2015/2016

2016/2017

2017/2018

Market Begin

Algeria

Jul 2015

Jul 2016

Jul 2017

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

1000

1000

900

900

0

1000

Beginning Stocks

1304

1304

1290

1290

0

1140

Production

1300

1300

1000

1000

0

1300

MY Imports

836

836

900

900

0

600

TY Imports

864

864

900

900

0

600

TY Imp. from US

0

0

0

0

0

0

Total Supply

3440

3440

3190

3190

0

3040

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

1800

1800

1700

1700

0

1700

FSI Consumption

350

350

350

350

0

350

Total Consumption

2150

2050

2050

2050

0

250

Ending Stocks

1290

1140

1140

990

0

990

Total Distribution

3440

3190

3190

3040

0

3040