The battle for the wheat market has never been fiercer, and at the center of this struggle is Algeria. While French exporters struggle to regain their position, Russian operators have established themselves as formidable competitors. In this article, we dive into the heart of this fierce battle for Algeria’s wheat supply, the global issues that arise from it, and the challenges facing Algerian farmers.
The Algerian Call for Tenders
Algeria, a North African country, is a major player in the global wheat market. The Algerian Cereals Office (OAIC) regularly launches calls for tenders for the purchase of wheat, and this year is no exception. The recent call for tenders from the OAIC concerns deliveries planned for February and March 2024.
For French exporters, this call for tenders represents a crucial opportunity. France, with its vast wheat stocks, is seeking to regain ground after a difficult start to the campaign. However, Russian competition, combined with wheat from the Black Sea, has put the French cereal industry under pressure.
Russian operators offered competitive prices, which led to high demand for Russian wheat in international markets. More than 70% of the 12 million tonnes imported by China were of Russian origin. Egypt, another key market, also favored Russian wheat with 11.6 million tonnes imported. It is therefore clear that the French export dynamic is far from being up to the always attractive Russian offers.
Russia: A Cereal Giant
Russia has made a spectacular inroads into the global grain market in recent years. In 2023, it harvested an exceptional quantity of wheat, estimated between 85 and 90 million tonnes. This record boosted its exports significantly.
According to the International Grains Council, Russia plans to export up to 46.2 million tonnes of wheat or more during the next season. Other experts estimate that this figure could reach 50 million tonnes. These volumes represent approximately 30% of the global market, giving Russia a dominant position in the global wheat market.
Marc Zbiri of FranceAgriMer points out that Russia has the potential to maintain a massive presence in the export market throughout the campaign, which significantly reduces the prospects of French exporters.
The Consequences on the International Market
Russia’s rise on the international grain scene has had a significant impact on the global market. French exporters, who traditionally had a significant share of this market, are now faced with fierce competition.
After increasing its wheat production by 4% to reach 35 million tonnes, France aims to export 17 million tonnes, including 7.5 million tonnes to the European Union. However, Russia has become a formidable adversary, ousting France from several key markets.
Algeria, Tunisia, and Bangladesh, among others, have all launched tenders to purchase wheat, attracting French exporters. Global demand for wheat is solid, and French operators are fighting for their share of the pie.
The Algerian Challenge
In Algeria, the cereal sowing campaign is underway. However, this year, Algerian farmers are facing significant challenges. The Minister of Agriculture and Rural Development, Youcef Cherfa, expressed his optimism about achieving the objective of increasing the areas dedicated to cereal cultivation to 3 million hectares. However, several obstacles stand in their way.
A lack of seeds has been one of the major problems reported by many farmers. To deal with this shortage, the State has made seeds and fertilizers available. However, the distribution of these resources is still in progress.
The delay in autumn rains, which occurred at the end of November, also disrupted the sowing campaign. Farmers find themselves faced with the challenge of sowing three million hectares of cereals in one month, while the yield potential decreases after the optimal sowing date.
Future Prospects
Competition for the global wheat market is ruthless, with Russia leading the race. French exporters, faced with competitive Russian offers, must rethink their strategy to regain ground.
In Algeria, farmers face climatic and logistical challenges to maintain wheat production and reduce their dependence on imports. Solutions, such as the adoption of simplified cultivation techniques (SCT), should be considered to improve sowing efficiency.
The battle for wheat is not only an economic issue, it has geopolitical, commercial, and environmental implications. France and other nations must adapt to this new reality and find innovative ways to meet the growing global demand for wheat while preserving their competitiveness in the international market.
Ultimately, the battle for Algeria is a microcosm of the global struggle for wheat, where the stakes are high, the players are many, and the challenges are many. Time will tell which country or region will gain the upper hand in this crucial competition to feed the planet.
