Algeria rejects French, Canadian wheat cargo deemed unfit for consumption

ALGERIA – Algeria was recently met with a shocking surprise after two dead animals were found in two separate batches of wheat cargo.

The incident forced the government of rejected the shipment of 27,000 tonnes of French milling wheat, indicating it was unfit for consumption.

According to the reports by Reuters, Algerian authorities are seeking compensation for the shipment, which was be sent back to France.

The North African country has also rejected a cargo of 33,000 tonnes of Canadian durum wheat for not meeting specifications, local media outlet Ennahar reported.

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Algeria aims to reduce import bills

Algeria is one of the world’s biggest wheat importers but is pursuing strategies to control imports, reduce spending and encourage domestic production.

Algeria aims to reduce the import bill for bread (common) wheat by US$400 million by 2024

Recently, the Ministery of Agriculture launched a five-year road-map (2020-2024) outlining a new strategy for agriculture sector development.

The new strategy aims to significantly reduce imports by US$2.5 billion of some expensive agricultural commodities including grains, milk powder, sugar, and vegetable oils.

With this roadmap, the government aims to reduce the import bill for bread (common) wheat by (-$400 million), corn by (-$17.6 million), vegetable oils by (-$983 million), sugar by ($-555 million), industrial tomatoes by ($-55 million) and potato seeds by (-$42 million) as well as garlic by (-$12 million).

As part of the strategy, the government decided to no longer subsidize durum wheat for pasta processing or bread (common) wheat not destined for bread production.

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However, the state has given an additional transitional period to the wheat industry before implementing the subsidy decree.

Further, it has also made available certified seeds and fertilizers in sufficient quantities for the planting season, in addition to making offering technical and financial support to the farmers.

Algeria sets in place favourable operating environment

In a bid to attract foreign and domestic investment in the sector, the country has revised the scope of partnership rule 49/51 for any activity producing goods and services.

These activities are open to foreign investment without obligation of association with a local party. However, this provision excludes product purchase/resale activities and those of a strategic nature.

The latter remains subject to resident national shareholding participation up to 51%.

To this end, opportunities exist for suppliers of silos to construct 15 metal storages with a capacity of 4.2 million quintals (420,000 MT), and 16 metal silos with 2.5 million quintals (250,000 MT) storage capacity, along with a collection center for cereals.

Despite Algeria turning focus to local production, it needs to import wheat (mainly bread wheat) to fulfil the domestic demand and stocks. To this end, USDA forecasts wheat imports to be at 6.5 MMT in MY2021/22.

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