Highlights

Following a mostly favorable growing season which set Tunisia up for a possibly substantial 2017 harvest, the wheat and barley crops have recently come under prolonged stress while entering the most pivotal growing period in late April. Post forecasts MY 2017/18 wheat and barley production at 1.2 MMT and 500,000 MT, respectively, and wheat and barley imports at 2.0 MMT and 750,000 MT.

Executive Summary

Post forecasts MY 2017/18 wheat production in Tunisia at 1.2 MMT and barley production at 500,000 MT.

• Ministry of Agriculture reported seeded area of wheat and barley for the MY 2017/18 crop at 724,000 HA for wheat and 666,000 HA for barley, an increase from 647,000 HA and 534,000 HA in MY 2016/17. Irrigated area expanded 3,000 HA. Increased area is supported by higher guaranteed farm-gate prices for wheat and barley as well as higher financial support for equipment, including irrigation.

• Grain and feed crops benefited from favorable conditions during the seeding period (mid-October to mid-December) and into the early growing season but became hampered in March by unfavorable temperatures and rainfall. Nevertheless, Post’s observed development of Tunisia’s wheat and barley crop remains favorable overall, including in typically marginal southern production areas. While rainfall has been sparse over the last month, potential grain output remains substantial as the crop enters a critical growing stage. Crop conditions in late April typically have the most influence in determining Tunisia’s resulting yield.

Tunisia wheat consumption in MY 2017/18 is forecast at 2.975 million MMT, reflecting a trend average of roughly 1.8 percent. Barley consumption is forecast 50,000 MT higher than 2016/17, following reports of increased barley feeding vis-à-vis a year ago despite satellite imagery indications of favorable vegetative conditions for grazing.

To cover demand and in an effort to rebuild stocks, Post forecasts Tunisia’s wheat imports in MY 2017/18 at 2.0 MMT while barley imports are forecast at 750,000 MT. Post also increases the MY 2016/17 estimate for wheat imports to 1.8 MMT in order to offset final production and reflect trade-to-date.

Finally, Post makes adjustments to the MY 2016/17 balance sheet to reflect official harvested area and production for wheat and barley.

Commodities:

Wheat

Barley

Area

Tunisia’s MY 2017/18 planted area for wheat increased compared to MY 2016/17 from 647,000 HA to 724,000 HA, of which 617,000 HA is durum wheat and 107,000 HA is common wheat. The planted area for barley is 666,000 HA, up from 534,000 HA last year. Irrigated area of wheat and barley increased from 77,000 HA to 80,000 HA.

Production

Post forecasts MY2017/18 wheat production at 1.2 MMT and barley production at 500,000 MT. Furthermore, Post forecasts durum wheat will account for about 85 percent of total wheat production. After promising weather conditions during the planting season (mid-October to mid-December), the wheat and barley crop began to suffer heat damage and drought since late February. Nevertheless, overall the crops still appear to be in good condition at present with good vegetation growth with no significant pest or disease issues. Some analysts believe that the production could increase by as much as 18 to 28 percent compared to last year, especially if the crops receive adequate rainfall during the critical period of March and April. Availability of seeds and fertilizers was reported as normal during seeding.

Post revised production downward in MY 2016/17 from 1.1 MMT to 990,000 MT for wheat and 400,000 MT to 390,000 MT for barley.

Tunisia’s official cereal production is reported by the state-run “Office des Cereales” (Cereal Board). In general, Tunisian production estimates are performed by the Ministry of Agriculture through an annual survey and in collaboration with the National Remote Sensing Center that provides estimates based on satellite imagery. Depending on the size of the crop in a given year, the quantity collected by the Cereal Board accounts for 40 to 60 percent of total wheat production and 10 to 40 percent of total barley production. Collection of local production has been privatized for both commodities yet the Cereal Board still has a monopoly on the sale of domestic wheat.

The government’s goal is to reach an average annual production of 2.7 MMT for cereals, of which 1.5 MMT is durum wheat. These amounts are considered necessary in order to achieve self-sufficiency. To help reach this goal, the Government:

• Subsidizes irrigation water in an effort to increase the area dedicated to irrigated wheat from 80,000 HA to 120,000 HA

• Provides technical assistance to farmers on irrigated land, targeting a yield increase from 3.5 to 5.0 MT/HA

Guarantees a set farm-gate price for wheat and a minimum price for barley to encourage local production. For MY2017/18, the Ministry of Agriculture increased the farm-gate prices as follows:

• 750 TD/MT for durum wheat ($329/MT)

• 540 TD/MT for common wheat ($236/MT)

• 480 TD/MT for barley ($210/MT)

• Subsidizes the use of certified seeds by limiting prices as follows:

• 25.4 TD/MT for durum wheat ($10.7/MT)

• 20.6 TD/MT for common wheat ($9/MT)

• 17.1 TD/MT for barley ($7.5/MT)

Effective April 2017, increased the subsidy for the cost of buying agricultural machinery from 25 to 50 percent and maintained the subsidy of 40 to 50 percent of the cost of irrigation equipment in order to promote private investment for cereals production.

Consumption

Wheat

Based on surveys prepared by the National Institute for Statistics and the National Institute for Consumption, Post calculates consumption of durum and common wheat has shifted over last decade from a 50:50 split to a 40:60 split in favor of common wheat.

Although Tunisia continues to support farm-gate prices to encourage wheat production, it also attempts to provide price support to consumers by subsidizing bread flour and controlling bread prices, which ultimately supports both the local population, which the United Nations estimates at 11.5 million, as well as the approximately 6.5 million tourists which the government projects will visit Tunisia in 2017. Many tourists will come from Algeria and Libya and have similar consumption habits. A recent study concluded bread waste in Tunisia constituted 16 percent of food waste, valued at $40 million annually.

Barley

Barley is consumed mainly in feedlots and as supplemental feed, especially when rangelands are stressed. Post estimates Tunisia’s barley consumption at about 1.1 million MT per year. While pastures were less stressed for the first portion of the marketing year compared to a year ago, recent dryness in the rangeland has caused barley consumption to be accelerate over the last month beyond rates from a year ago.

Trade

Tunisia’s Cereal Board maintains a monopoly on wheat and barley imports for the domestic market and typically offers tenders with broad quality specifications, which generally results in low-quality, price-sensitive wheat purchases. Private millers may import for processing and re-export.

Wheat

Tunisia relies on wheat imports, particularly common wheat, even in good production years. Post forecasts imports to reach 2.0 MMT in MY 2017/18, in order to meet expanded consumption demand as well as return stocks to a normal level. For MY 2016/17, Post increased its estimate for Tunisian wheat imports to 1.8 million MT to offset a smaller than expected production estimate.

Tunisia sources most of its imported wheat from the Ukraine, Italy, and Canada, while to a lesser extent from the United Kingdom, Romania, and Russia. Tunisia’s wheat imports from the United States were 49,000 MT in MY 2015/16 with no sales recorded or forecast for 2016/17 or 2017/18. There has been a significant increase in re-exports of semolina and wheat flour from Tunisia to Libya, primarily through unofficial channels. Officially, exports of Tunisian wheat products require an export license unless the wheat used was imported under the temporary admission regime.

Barley

For MY 2017/18, barley imports are forecast to reach 750,000 MT, a 25 percent increase compared to MY 2016/17, based on smaller stocks at the end of MY 2016/17 and increased domestic demand. For MY 2016/17, Post holds its estimate of barley imports at 600,000 MT.

Production, Supply and Distribution (PSD) Statistics

Wheat

Wheat

2015/2016

2016/2017

2017/2018

Market Begin Year

Jul 2015

Jul 2016

Jul 2017

Tunisia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

546

546

550

516

0

621

Beginning Stocks

781

781

743

743

0

593

Production

912

912

1100

990

0

1200

MY Imports

1975

1975

1700

1800

0

2000

TY Imports

1975

1975

1700

1800

0

2000

TY Imp. from U.S.

49

49

0

0

0

0

Total Supply

3668

3668

3543

3533

0

3793

MY Exports

25

25

15

15

0

20

TY Exports

25

25

15

15

0

20

Feed and Residual

25

25

25

25

0

25

FSI Consumption

2875

2875

2900

2900

0

2950

Total Consumption

2900

2900

2925

2925

0

2975

Ending Stocks

743

743

603

593

0

798

Total Distribution

3668

3668

3543

3533

0

3793

Barley

Market Begin Year

Jul 2015

Jul 2016

Jul 2017

Tunisia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

379

379

380

280

0

375

Beginning Stocks

390

390

237

237

0

147

Production

366

366

400

390

0

500

MY Imports

561

561

600

600

0

750

TY Imports

696

696

600

600

0

750

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

1317

1317

1237

1227

0

1397

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

1000

1000

1000

1000

0

1050

FSI Consumption

80

80

80

80

0

80

Total Consumption

1080

1080

1080

1080

0

1130

Ending Stocks

237

237

157

147

0

267

Total Distribution

1317

1317

1237

1227

0

1397