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Algeria buys 700,000 tonnes of wheat as record harvest leaves bread grain gap

· Algeria Now
Algeria buys 700,000 tonnes of wheat as record harvest leaves bread grain gap
Photo : Eugen Staab / Wikimedia Commons, Public domain

Algeria's state grain agency has bought more than 700,000 tonnes of soft wheat in a single tender, a reminder that a harvest officials have hailed as historic has not freed the country from imports of the grain used for its bread. The Algerian Interprofessional Cereals Office (OAIC), which holds a monopoly on cereal imports, closed the tender on Wednesday, two days after launching it, European traders said.

The price, put by traders at about $313 a tonne including freight, was below the roughly $326 paid for 600,000 tonnes in mid-October but well above the $268 to $270 secured in September. The OAIC does not publish its foreign purchases. With this deal, Algeria's soft wheat imports since January exceed 5.3 million tonnes. Cargoes from Europe are due to be shipped in January, while a large share may come from Argentina, where the new harvest is offering competitive prices.

Two kinds of wheat, two different stories

The purchase sits awkwardly beside a bumper season. In August the Interior Minister, Saïd Sayoud, announced what he called a historic cereal harvest of five million tonnes. The National Professional Council for Cereals says the country has now reached self-sufficiency in durum wheat, used for semolina and couscous, and in barley, used mainly as sheep feed. In July President Abdelmadjid Tebboune estimated that ending durum imports would save more than $1.5 billion, since durum costs about one and a half times as much as soft wheat on world markets.

Soft wheat is another matter. Algeria is historically a durum country, while its towns eat bread made from subsidized flour milled from soft wheat. National cereal needs are estimated at more than 12 million tonnes a year, far above domestic output, which keeps Algeria among the world's largest wheat buyers and exposed to swings in global prices and freight costs.

The government is trying to close that gap. At a Council of Ministers devoted to agriculture last Sunday, Mr Tebboune ordered a total ban on using maize as green fodder, a crackdown on the withholding of farm produce to inflate prices, and a new plan for organising agriculture locally, with more accurate and modern statistics. A national programme of silos and collection centres is meant to keep more of the domestic crop in the state system.

What comes next

The stakes are fiscal and social: cheap bread is a pillar of Algeria's social contract, and imports are paid for largely with hydrocarbon revenue. The coming months will show whether the new ploughing season, under way since early November, and the tighter rules announced by the presidency can extend the durum success to soft wheat, or whether the OAIC's tenders remain a fixture of world grain markets.

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