Algeria Expected to Import More Wheat in 2023-2024

Algeria’s wheat imports are expected to increase and stand at 8.7 million tonnes, according to a recent note from the United States Department of Agriculture (USDA) for the 2023/2024 campaign.

Imports which should take place in a context of increased tensions on the world cereal market .

These purchases should be 1.2 million tonnes higher than in 2022. The USDA expects a lower harvest forecast of 2.7 million tonnes of wheat in Algeria, which represents nearly 600,000 tonnes less production.

Wheat harvest in Algeria: the effect of drought

The United States Department of Agriculture, based on observations of satellite images, estimates that it is the drought and the high temperatures which caused the drop in the average yield in the non-irrigated zones in Algeria. This should reach 13 quintals against 15 quintals the previous season, mainly in the non-irrigated areas.

The USDA estimates local annual consumption at 11 million tons, contrary to local estimates of 9 million, which places Algeria as the world’s second largest importer after Egypt.

Wheat: a changing Ukrainian context

These future Algerian wheat imports should take place in a context marked by events in Ukraine. The price of a tonne of wheat fluctuates according to the conflict and the harvest forecasts of the main exporting countries.

Thus, few reactions followed the termination of the agreement on the Black Sea corridor which allowed the export of 33 million tonnes of Ukrainian wheat. The explanation lies in the existence of a second export channel through the Ukrainian river ports of Reni and Izmail, on the Danube.

For analyst Andrey Sizov of the firm SovEcon: “ The stoppage of shipments from Odessa does not change the situation now. Ukraine can ship more than 40 million tons of grain via other routes, which more or less matches its export potential for 2023-2024. According to the Ukrainian administration, the country would have exported 2.1 million tons of agricultural products, compared to 1.6 million tons in July 2022.

But the recent bombardments of these ports have changed the situation and caused a sudden surge in prices. On July 24 on Euronext, the December 2023 contract reached €266 per tonne against an average of €230 in recent weeks.

If Ukrainian exports continue on the Danube ports, observers note the beginning of infrastructure congestion. The roads are jammed with trucks loaded with grain waiting up to 8 days to be unloaded.

The European Union is considering opening a third export channel through the Baltic countries. This alternative would allow the annual export of 25 million tons, but with an increase in the cost of these cereals.

As for world grain supplies, they remain substantial due to Russian surpluses dating from the exceptional previous campaign with 153 million tonnes produced.

This makes Russia the world’s leading exporter. The severe drought that has affected the grain-growing regions of the USA does not seem to affect this optimism, especially since in 2023, with forecasts of 123 million tonnes, Russian wheat production should be significant. The only shadow on the horizon is that the current rains in Europe have recently delayed the current Russian harvest.

Algeria: The challenge, more areas for wheat

More than ever, the recent events in the Black Sea and the vagaries of the weather are weighing on the evolution of world wheat prices. In Algeria, despite the efforts of agricultural services, local wheat production is not increasing.

Out of 7 million hectares located in the north of the country, a recent census reported 1.8 million hectares sown with cereals against a previous estimate of 3 million hectares.

It seems that previously this estimate was based on the number of seeds produced by the Cereals and Pulses Cooperatives (CCLS), ie 3 million quintals.

At the rate of a dose of 100 kg of seed per hectare, the estimate made it possible to assume sowings of the order of 3 million hectares. But that is without taking into account the practice of farmers consisting in increasing the doses of sowing in order to compensate for the poor preparation of the soil and the resulting losses at emergence.

In addition, nearly 3 to 3.5 million other hectares would be fallow, that is to say not worked or used for grazing sheep. If on land with high potential, modern techniques are progressing, this is not the case in non-irrigated marginal areas. The agricultural services are struggling to develop the appropriate techniques.

There remains the bet of the Ministry of Agriculture and Rural Development which provides for the cultivation in the South of one million hectares which should be devoted to cereals and strategic crops.

To increase its wheat production, Algeria thus has several levers: Saharan agriculture and the cereal-growing regions of the North, whose potential remains real.

Algeria’s wheat imports are expected to increase and stand at 8.7 million tonnes, according to a recent note from the United States Department of Agriculture (USDA) for the 2023/2024 campaign.

Imports which should take place in the context of increased tensions on the world cereal market.

These purchases should be 1.2 million tonnes higher than in 2022. The USDA expects a lower harvest forecast of 2.7 million tonnes of wheat in Algeria, which represents nearly 600,000 tonnes less production.

Wheat harvest in Algeria: the effect of drought

The United States Department of Agriculture, based on observations of satellite images, estimates that it is the drought and the high temperatures which caused the drop in the average yield in the non-irrigated zones in Algeria. This should reach 13 quintals against 15 quintals the previous season, mainly in the non-irrigated areas.

The USDA estimates local annual consumption at 11 million tons, contrary to local estimates of 9 million, which places Algeria as the world’s second-largest importer after Egypt.

Wheat: a changing Ukrainian context

These future Algerian wheat imports should take place in a context marked by events in Ukraine. The price of a tonne of wheat fluctuates according to the conflict and the harvest forecasts of the main exporting countries.

Thus, few reactions followed the termination of the agreement on the Black Sea corridor which allowed the export of 33 million tonnes of Ukrainian wheat. The explanation lies in the existence of a second export channel through the Ukrainian river ports of Reni and Izmail, on the Danube.

For analyst Andrey Sizov of the firm SovEcon: “ The stoppage of shipments from Odessa does not change the situation now. Ukraine can ship more than 40 million tons of grain via other routes, which more or less matches its export potential for 2023-2024. According to the Ukrainian administration, the country would have exported 2.1 million tons of agricultural products, compared to 1.6 million tons in July 2022.

But the recent bombardments of these ports have changed the situation and caused a sudden surge in prices. On July 24 on Euronext, the December 2023 contract reached €266 per tonne against an average of €230 in recent weeks.

If Ukrainian exports continue on the Danube ports, observers note the beginning of infrastructure congestion. The roads are jammed with trucks loaded with grain waiting up to 8 days to be unloaded.

The European Union is considering opening a third export channel through the Baltic countries. This alternative would allow the annual export of 25 million tons, but with an increase in the cost of these cereals.

As for world grain supplies, they remain substantial due to Russian surpluses dating from the exceptional previous campaign with 153 million tonnes produced.

This makes Russia the world’s leading exporter. The severe drought that has affected the grain-growing regions of the USA does not seem to affect this optimism, especially since in 2023, with forecasts of 123 million tonnes, Russian wheat production should be significant. The only shadow on the horizon is that the current rains in Europe have recently delayed the current Russian harvest.

Algeria: The challenge, more areas for wheat

More than ever, the recent events in the Black Sea and the vagaries of the weather are weighing on the evolution of world wheat prices. In Algeria, despite the efforts of agricultural services, local wheat production is not increasing.

Out of 7 million hectares located in the north of the country, a recent census reported 1.8 million hectares sown with cereals against a previous estimate of 3 million hectares.

It seems that previously this estimate was based on the number of seeds produced by the Cereals and Pulses Cooperatives (CCLS), ie 3 million quintals.

At the rate of a dose of 100 kg of seed per hectare, the estimate made it possible to assume sowings of the order of 3 million hectares. But that is without taking into account the practice of farmers consisting in increasing the doses of sowing in order to compensate for the poor preparation of the soil and the resulting losses at emergence.

In addition, nearly 3 to 3.5 million other hectares would be fallow, that is to say not worked or used for grazing sheep. If on land with high potential, modern techniques are progressing, this is not the case in non-irrigated marginal areas. The agricultural services are struggling to develop the appropriate techniques.

There remains the bet of the Ministry of Agriculture and Rural Development which provides for the cultivation in the South of one million hectares which should be devoted to cereals and strategic crops.

To increase its wheat production, Algeria thus has several levers: Saharan agriculture and the cereal-growing regions of the North, whose potential remains real.