{"id":8410,"date":"2021-01-26T16:23:27","date_gmt":"2021-01-26T21:23:27","guid":{"rendered":"https:\/\/jazairhope.org\/?p=8410"},"modified":"2021-01-26T16:23:27","modified_gmt":"2021-01-26T21:23:27","slug":"algeria-a-battle-between-paris-and-moscow-for-the-wheat-market","status":"publish","type":"post","link":"https:\/\/jazairhope.org\/en\/algeria-a-battle-between-paris-and-moscow-for-the-wheat-market\/","title":{"rendered":"Algeria : a battle between Paris and Moscow for the wheat market"},"content":{"rendered":"
\n

 <\/p>\n

By\u00a0Estelle Maussion, in TheAfricaReport.com<\/strong>
\nPosted on Wednesday, 20 January 2021 12:57<\/p>\n

Algeria’s desire to diversify its wheat supply has led to competition between France and Russia. A strategy that involves risks, explains the analyst S\u00e9bastien Abis.<\/p>\n<\/div>\n

\n

Neither Algeria\u2019s President Abdelmadjid Tebboune nor his country needed this. In the context of the current economic crisis and a tense political transition, Algeria has been shaken by a scandal involving the import of rotten wheat, a highly sensitive issue in terms of food security.<\/p>\n

The story broke out in November 2020 with the discovery, in the port of Algiers, of 30,000tn of soft wheat from Lithuania declared unfit for consumption.<\/p>\n

After the dismissal of Abderrahmane Bouchahda, the director general of the\u00a0Office Alg\u00e9rien Interprofessionnel des C\u00e9r\u00e9ales<\/em>\u00a0(OAIC) \u2013 a public body that imports the wheat consumed in the country \u2013 President Tebboune ordered an investigation to be opened at the beginning of January and instructed the finance ministry to carry out an audit of the OAIC.<\/p>\n

An issue taken very seriously<\/h3>\n

Even though it was a very small shipment \u2013 the country has imported about 8m tonnes of wheat a year over the past five years \u2013 the issue was taken very seriously. And for good reason: wheat, which is widely consumed in Algeria and subsidised to ensure that the price of processed products (flour, bread and pasta) remains affordable, is a strategic commodity.<\/p>\n

Despite efforts to develop national production (around 4m tonnes per annum), Algeria must resort to importing on a massive scale to satisfy a consumption which is constantly growing (around 12m tonnes per annum).<\/p>\n

Lack of transparency in the sector<\/h3>\n

As a result, the country is the world\u2019s fifth-largest importer of cereals, surpassed on the continent only by Egypt, in first place. This good weighs heavily on Algeria\u2019s budget, averaging around $3bn a year over the past 10 years.<\/p>\n

Not to mention the lack of transparency in a sector that Bouchahda shook up in 2019, by closing nearly 50 mills and placing some 300 others under surveillance on suspicion of corruption.<\/p>\n

S\u00e9bastien Abis \u2013 a researcher at the\u00a0Institut de Relations Internationales et Strat\u00e9giques<\/em>\u00a0and president of the\u00a0Club\u00a0<\/em>D\u00e9m\u00e9ter \u2013 who published\u00a0G\u00e9opolitique de l\u2019Agriculture<\/em>\u00a0in October 2020 (Eyrolles Publishing House), explains that the incident involving the Lithuanian wheat illustrates Algeria\u2019s desire to secure its sources of wheat supply.<\/p>\n

However, amidst a rise in global food prices and domestic tensions, this strategy is not without economic, political and health risks.<\/p>\n

How does the incident involving the wheat shipment from Lithuania represent a shift in Algeria\u2019s supply strategy?<\/strong><\/p>\n

S\u00e9bastien Abis:<\/strong>\u00a0Lithuania is not a historical or massive supplier to the country. It is France that occupies this position since on average over the past few years, 70 to 90% of the soft wheat bought each year by Algeria has come from France.<\/p>\n

However, in 2020, France\u2019s grain harvest was not good. Anticipating possible difficulties, Algeria diversified its suppliers, looking in particular towards Eastern Europe and Russia. The latter, meanwhile, was boasting about the increase in its production.<\/p>\n

In September, Bouchahda decided to modify the specifications for wheat imports, by increasing the amount of grain impurities from 0.1% to 0.5%. With the introduction of this technical measure, which allows different qualities of wheat to enter the country, it opened the way for imports from the east.<\/p>\n

This has strengthened Lithuania\u2019s position and enabled Russia to position itself on this market, which was not previously possible. It is normal for the range of risks to increase when the sources of supply are increased. The quality of wheat is not the same from all origins.<\/p>\n

Has Russia succeeded in establishing itself in the Algerian market?<\/strong><\/p>\n

Despite its resounding return to the global wheat market, Russia \u2013 which is the world\u2019s leading exporter \u2013 has not yet made a breakthrough in Algeria, unlike Egypt where it is now dominant.<\/p>\n

For the period from 1 June to 30 November 2020, corresponding to the latest available figures, it did not appear amongst the soft wheat suppliers. Of the 2.4m tonnes purchased, 41% came from France, which has maintained its leading position, and 23% from Lithuania, in second place. Germany, Latvia and Poland followed suit. That said, Russia has started supplying some wheat since the end of 2020.<\/p>\n

Regarding durum wheat (300,00tn purchased between June-November 2020), the top trio is stable: Canada was the main supplier (50%), ahead of Mexico (40%) and France (10%).<\/p>\n

The question of the governance of the sector is topical. Certain private actors plead for liberalisation, criticising the OAIC. What is the executive\u2019s room for manoeuvre?<\/strong><\/p>\n

The equation is complex. In a context of rising world wheat prices \u2013 currently more than \u20ac200 ($242) per tonne \u2013 Algeria is torn between two imperatives: to wait out the clock in the hope of buying at the best price and ensuring its food security.<\/p>\n

At the same time, the executive, weakened by economic difficulties and political tensions, has to deal with a sector that is in the process of restructuring in order to make it more transparent.<\/p>\n

Private millers, who have become very rich in recent years, no longer hesitate to point out the OAIC\u2019s weaknesses. However, privatising a sensitive sector like wheat is not that simple.<\/p>\n

Some highlight the example of Morocco, where cereal purchases are made directly by private actors. This is true, but this is done within the framework defined by a public office which plays a key role in the organisation of the sector.<\/p>\n

In Egypt, where the management of the sector is not immune to criticism, the system is mixed: the state via its dedicated office (General Authority for Supply Commodities) and private companies sharing purchases equally. Any possible evolution of the Algerian model will have to eliminate unpredictability, the worst threat in the wheat sector, which is directly at the heart of food security.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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