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Algeria gives green light to Russian wheat

06 October 20203 min reading

In 20 years, Russia has gone from being reliant on wheat imports to accounting for a fifth of global sales, as its fertile soils generate bigger harvests at attractive prices. More than 100 nations from Egypt to the Philippines buy its grain, and Russia has sought to extend that list by adding markets where its wheat has been excluded because of rules over grain quality. That ambition passed a milestone last month when major buyer Algeria gave Russia the green light to step up shipments there. That followed a similar move last year from Saudi Arabia, another country that Russia has struggled to break into. Algeria’s state grains agency OAIC said it would start accepting wheat imports from all countries, including Russia, from its next tender. OAIC has circulated modified tender terms showing a relaxed bug damage limit for high-protein milling wheat, removing a bar to cheaper Black Sea origins. Until now, Russia has only been able to ship small amounts to the joint third-biggest buyer, which has required low levels of bug damage in cargoes. A trial shipment passed quality tests there earlier this year, although sales may take time to reach significant levels. Algeria has effectively barred Russian wheat due to a strict limit on bug damage in grain, making it one of the few import markets not to have seen a rise in flows from Russia, the world’s largest wheat supplier. If cheaper Russian wheat is successful at gaining more access to Algeria, the world’s third largest wheat importer, farmers in Europe, especially France, top wheat suplier to Algeria, could lose out. French wheat producers fear their dominant position in Algeria’s market could be challenged as Russia gains access to the North African country’s import tenders. Algeria in recent years has accounted for around half of French soft wheat exports outside the European Union, and the share has been even greater so far in the 2018/19 season at about 80 percent. France was expected to ship between 1.5 million and 2.5 million tonnes of wheat to Algeria this season, down from at least five million tonnes in previous years.

RUSSIA INCREASES WHEAT EXPORTS As well as starting sales to Saudi Arabia this year after the kingdom relaxed bug-damage rules, Russia increased wheat exports to countries from Turkey to Brazil and Vietnam to Tanzania in recent years. Helped by its second-largest harvest ever, Russia is expected to ship out 37.5 million tons this season and reclaim its ranking as the world’s top exporter. Russia’s cheap supplies have seen it grab export-market share from the U.S. to European Union in the past decade, dominating sales to countries like Egypt, where it has won about 80% of tenders so far this season.

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