The Algerian government announced that it would reduce its wheat imports to 4 million tons to preserve foreign currency reserves which run out over the years. The government has also set the actual needs of the domestic market for soft wheat at 4 million tonnes instead of 6.2 tonnes imported each year.
However, traders remained skeptical about Algeria’s ability to reduce wheat imports so steeply, given low domestic production and the importance of its subsidized bread program.
Algeria is one of the world’s biggest buyers of wheat, sourcing most of its supply from France. However, hit by lower oil prices since 2014, it is trying to reduce its imports.
It spent about $3 billion on wheat imports last year, including durum wheat, flour, and semolina. In 2018, the grain import bill was $ 2.15 billion. Grain import accounts for 33.8% of the overall food imports.
Mass protests this year, which led to the departure of longstanding President Abdelaziz Bouteflika, have also pushed the interim government to target corruption.
In July the government removed the head of state grains agency OAIC after a corruption investigation and has also closed some of the country’s 500 flour mills.
After the closure of 45 mills, more than 300 others are under investigation, an agriculture ministry source said. OAIC also refrained from any wheat imports in October, breaking with its usual practice of holding tenders every calendar month.