Algeria eyes Russian wheat imports in break with France

For Russia, taking a larger share of Algeria’s wheat market would be a foreign policy advance.
Sunday 14/10/2018
Combines harvest wheat in the region of Krasnoyarsk in Russia. (Reuters)
Grain superpower. Combines harvest wheat in the region of Krasnoyarsk in Russia. (Reuters)

TUNIS - Algeria dispatched a delegation of senior government officials to Russia to assess the quality of Russian wheat ahead of a potential agreement that would replace its wheat imports from France, with which Algiers has strained ties.

Algeria, the world’s third largest wheat importer, previously brought in up to 40% of France’s wheat output annually but its move towards Russian wheat was an indication of worsening ties between Algiers and Paris, analysts said.

“In the context of current relations between Algeria and France, the issue of the shift of import to Russia far exceeds the framework of grains market,” said Algerian political writer Abla Cherif. “The Algerian move to turn to Russian wheat comes when ties between Russia and Algeria are at their highest level while relations with France are frozen.”

“If Algeria joins the list of African countries like Cameroon, Senegal and Egypt, France will suffer a trade blow,” Cherif added.

Algerian news website Alg24, which is seen as close to the Algerian presidency, commented that “France was put in a cold sweat as government officials from Algeria and Russia discussed the imports of wheat from Russia.”

Algeria, with a population of 41 million, imported 8.2 million tonnes of wheat in 2017 and 8.4 million tonnes the previous year. This year, it expects to buy 7.2 million tonnes after recording its largest harvest in five decades.

Algeria’s cereals output for 2018 reached 6 million tonnes, 74.4% higher than in the previous season.

“It is a record production of cereals (that) Algeria has never achieved since its independence,” Algerian Agriculture Minister Abdelkader Bouazghi said in a statement last month.

An Algerian expert said the country previously bought French wheat “even when the quality and price of Russian wheat was competitive” due to close trade ties between Paris and Algiers.

“There is a shift in the wheat market recently with importers increasingly selecting less the French wheat and traditional clients of France turning more to Russian and Ukrainian wheat as they find the quality better,” said Algerian economist Hamadi Riad.

Algeria had been an exception to this rule, Riad said, because the state grain buyer, the Algerian Interprofessional Office of Cereals (OAIC), imposed “criteria in favour of the French wheat market.”

Algerian political writer Hani Abdi said Algeria’s move to import Russian wheat products in response to France’s pressure on Algeria to stem the flow of illegal migration from the Sahel and expend more resources on the fight against jihadism in the region.

Abdi pointed out that Algeria’s shift in import policy came two weeks after the government was angered by comments from the French intelligence chief regarding Algerian President Abdelaziz Bouteflika’s health.

Bernard Bajolet, France’s chief of foreign intelligence, said: “President Bouteflika, with all the respect I have for him, is now being kept alive artificially.” He added that the Bouteflika’s leadership was a major impediment to improving French-Algerian ties.

Bouteflika, 81, has not announced whether he will seek a fifth term in office in next year’s elections but the country’s political establishment has rallied behind him.

Bajolet, who served as France’s ambassador to Algeria from 2006-08, this month said Algerian authorities were “protecting” the chief of a jihadist group in neighbouring Mali.

Many Algerian media outlets argued that Bajolet was on “a mission to speak for (French) President Emmanuel Macron.”

For Russia, taking a larger share of Algeria’s wheat market would be a foreign policy advance but it would come at the expense of western European farmers, especially in France.

France is the top supplier of wheat to Algeria, which uses a large portion of the money earned from its crude oil sales to feed its population.

Algerian agriculture experts said Algeria would benefit from cooperating with Russia to develop its farming sector. Both Algeria’s and Russia’s farming sectors were previously under central command but Russia developed its agricultural system after the Soviet Union collapsed while Algeria struggled to make advances.

Russia can more readily transport wheat to the countries in the Middle East and North Africa region, which account for 25% of the world’s wheat market, giving it an advantage in the market.

Nearly half of the world’s countries import wheat from Russia, the largest buyers being in the Middle East and North Africa, including Egypt.

Russia’s wheat production has increased in recent years, with good growing conditions such as more fertile soil boosting farmers’ gain, allowing them to reinvest in better seeds and equipment.

Bolstered by state support, Russian farmers incur costs as low as half of their major competitors, making their goods competitive on the international market. In addition, lower oil prices since 2014 have caused the Russian currency to depreciate, making Russian grain more attractive to importers.