Grain and Flour Market in Tunisia
19 November 201412 min reading
Grain production is done in an agricultural area of 1.3 million hectare in Tunisia. Europe and Black Sea countries are the most important grain supplier of Tunisia. It is stated that usually prices are the main concern in imports done by the State, low quality products are imported; thus it leads to complaints among producers. Main policy of the country is to reduce imports by increasing production to levels meeting the grain demand of the country. Achieving a production volume of 2.7 million tons for self-sufficiency is the most important goal.
Tunisia is considered as the second most powerful country in North Africa. Food industry corresponds to 16.6 percent of the production in manufacturing industry of the country. The priority is given to processing agricultural products in industrialization policies of the state. The country imported all kinds of food products until quite recently, therefore objectives of such policies is to bring the country to a level of self-sufficiency and gain the capability to export staple food products such as pasta, couscous, tomato pastes, margarine and olive oil. However, so far, it did not reach to self-sufficiency levels particularly in grain production. For this reason, a substantial amount of grain products such as barley and corn is imported from foreign countries. Wheat is given priority in imports rather than flour.
ECONOMIC OUTLOOK IN TUNISIA
General structure of the economy in Tunisia shows that the state intervened in the economic life significantly starting from 1956 when the country became independent until 1970s. Vast lands owned by foreigners as a consequence of the colonial period were expropriated in 1964 and distributed to peasants and during the same period, peasants took steps towards organization under the umbrella of agricultural cooperatives. However, the aforementioned efforts were hindered as a result of widespread opposition in rural areas and the pressure from creditor states. Although some measures were enacted in Tunisia starting from 1972 with the purpose of encouraging private sector investments, real steps towards transforming into a free market economy were taken as late as 1987.
Economy in Tunisia is a developing economy with agriculture, mining, energy and manufacturing industries. Financial aids provided by bother Western countries (EU) and international organizations have an important place in investments towards development.
Economy in Tunisia continues to display a relatively positive outlook despite various economic fluctuations around the world. Tunisian Government displays great effort to implement the economic interventions by giving priority to minimize the negative effects on social stability and employment. Tunisia has been the least affected country from the global crisis when compared with the rest of the world.
Estimations indicate that GDP of Tunisia will be over 4 percent per annum until 2018. During this period, annual growth expectation for industrial production and agricultural production is 4.2 percent and 2.6 percent, respectively. For the same period estimations on inflation indicate an approximate annual increase of 4.6 percent.
Tunisia was considered as the second most powerful country in North Africa in Competitiveness Report of World Economic Forum that was held in Davos in 1998.
THE PLACE AND IMPORTANCE OF
AGRICULTURE IN TUNISIA
Agriculture sector is one of the most important sectors in Tunisia and it has an unquestionable place in the country`s economy with its 9 percent contribution to GDP and 6 percent share in total exports. Total value of agricultural and food products export of the country is 1 billion dollars. Tunisia have become a self-sufficient country with respect to food products and the difference between the production and consumption of agricultural products decreases gradually.
Tunisia is an importer of food products, but it is also an exporter of agricultural products (particularly olive oil). Approximately 75% of the olive oil produced in Tunisia is exported depending on the annual consumption rate. Tunisia is the largest olive oil producer in the world after the EU and olive oil exports of the country correspond to 25 % of the total agricultural products exports. In addition to agricultural products such as date, citrus, grapes, various vegetables subject to trading, fishery and aquaculture products are other agricultural activities of the country. The share of EU countries is 44 percent while the share of Maghreb countries (Morocco, Tunisia, Algeria, Libya, Mauritania) is 24 percent.
The area of agricultural lands is 8.575 million hectare in Tunisia. 4.9 million hectare of this area is in-service. The population of the country dealing with agriculture actively is 516.000. 90 percent of the cultivated lands in Tunisia is owned by the private sector. The part owned by the state is rented for long terms.
Grain production is done in an agricultural area of 1.3 million hectare. This figure is less than the area of 1.6 million hectare that was used in the previous years. Europe (France and Italy) and Black Sea countries (Ukraine and Russia) are the most important grain suppliers of Tunisia. It is stated that usually prices are the main concern in imports done by the State, low quality products are imported; thus it leads to complaints among producers. Main policy is to meet the grain demand of the country and reduce the volume of imports by increasing the production. Achieving a production volume of 2.7 million tons for self-sufficiency is the most important goal.
PRODUCTION AND CONSUMPTION
OF GRAINS AND PULSES
Grain production of Tunisia is not very high. Substantial part of the country`s grain demand is met by foreign countries. Data from Foreign Trade Service of United States Department of Agriculture (USDA-FAS) show that the highest production figure among grain products belongs to wheat. According to the data from USDA, wheat production of the country that follows an unstable track reached to the highest production volume of the decade in 2004/05 season. The production that was 1.7 million tons in 2004/05 season declined to 821 thousand tons in 2010/11 season, it showed a substantial increase in 2011/12 when compared to the previous season and increased to 1.2 million tons, and it reached to 1.3 million ton level in 2013/14 season. However, a significant decline was encountered in production in 2013/104 season and wheat production of the country amounted 970 thousand tons. USDA anticipates wheat production to increase to 1.4 million ton level in 2014/15 season.
The entire amount of the wheat production in Tunisia is consumed internally, however the production fails to meet the demand. Considering wheat consumption of the country, the consumption is more than double the production. Data from USDA shows that wheat consumption of Tunisia that was 2.4 million tons in 2003/04 season reached to 3.3 million tons in 2007/08 season which is the highest level for the decade. The consumption declined in the latter seasons and it is around 2.8 million tons for the last 4 seasons. The same level is expected for 2014/15 season, too.
Among grain products, barley has the highest production rate after wheat. Barley production of the country displays an unstable outlook similar to wheat. Data from USDA shows that barley production of Tunisia that was 700 thousand tons in 2003/04 season remained between 250 thousand ton and 400 thousand ton levels until 2009/10 season. Barley production of the country that reached to the highest level of the decade in 2009/10 season with 879 thousand tons declined in the latter seasons and remained at 320 thousand ton levels in 2013/14 season. USDA expects substantial increase in barley production of Tunisia in 2014/15 season. According to USDA, production will increase up to 900 thousand tons in this season.
In common with wheat, all of the barley production is also consumed internally and production does not meet the demand. Barley consumption of the country that was 600 thousand tons in 2003/04 season increased to 1 million tons in 2005/06, 2006/07 and 2007/08 seasons. Consumption that declined in the latter seasons is between 800 and 900 thousand tons for the last 4 seasons. Consumption is estimated to reach 950 thousand tons in 2014/15 seasons.
Corn is another product that is not produced but consumed intensively in Tunisia with almost no production for other grains. Corn consumption that was 800 thousand tons in 2003/04 season declined to 600 thousand ton levels in the following 2 seasons, it started increasing starting from the 2006/07 season and reached to 900 thousand ton levels in 2013/14 season. USDA estimates that Tunisia will produce around 950 thousand ton corn in 2014/15 season. Data from United Nations Food Organization, FAO, shows that pulses production in Tunisia varies between 15 thousand and 26 thousand tons. FAO data shows that pulses production that was 22 thousand tons in 2003 declined to 21 thousand tons in 2004 and 15 thousand tons in 2005. Pulses production of the country that increased in the latter years reached to 20 thousand tons in 2008 and 25 thousand tons in 2009. Average production of the country for the last 3-year period is around 26 thousand tons.
FOREIGN TRADE IN TUNISIA
If we look at foreign trade in Tunisia, we see that exports increased by 0.3 percent and reached to 17.06 billion dollars in 2013 when compared with the previous year, imports declined by 0.8 percent down to 24.26 billion dollars; rate of exports meeting imports reached to 70 percent. Foreign trade deficits of Tunisia persistently increases with each year and the country had 2.9 billion dollars foreign trade deficit in 2006 and this deficit increased to 7.2 billion dollars deficit in 2013. Export pattern of Tunisia also reflects to the production pattern on the country. Electrical and non-electrical machinery rank first in exports of the country with a share of 23 percent and it is followed by textile and ready-garment products with a share of 18 percent. The aforementioned products are followed by mineral oils with 15 percent share, herbal oils with 4 percent and fertilizer with 3.5 percent.
The share of consumer products is as high as 30 percent in imports of Tunisia. This situation indicates that the country is not self-sufficient in terms of industry. Imports of the country mainly consists of textile raw materials particularly including cotton and fabric, industrial tools and machinery, energy raw materials such as mineral fuels, automotive supply industry and plastic materials and derivatives, grains, iron and steel. Foreign trade activities of the country are mainly carried out with the EU countries. Tunisia is the first country to sign Association Agreement with the EU among other Arab countries. Tunisia realized 71.3 percent of its exports and 55.8 of its imports with the EU countries in 2013. Data from the year 2013 shows that France, Italy and Germany are the EU counties with the most intensive trade and economic relations with Tunisia. Free trade zone was established between Tunisia and the EU starting from 1 January 2008. Tariff discounts apply to the manufacturing industry and it does not apply to agricultural and processed agricultural products. In addition, negotiations were initiated for service and agriculture sectors on March 2008 within the scope of "Expanded Free Trade Zone". Tunisia demanded privileged partnership status during Tunisia-EU Membership Council meeting held on 11 November 2008.
THE IMPORTANCE OF GRAINS AND
FLOUR IN FOREIGN TRADE
Tunisia meets substantial part of its grain and flour demand from foreign countries. Data from USDA shows that the country imports more than 1 million tons of wheat every year. Annual import figures show that total volume of wheat imports that was 781 thousand tons in 2003 increased to 1 million tons in 2004, 1.2 million tons in 2005, 1.4 million tons in 2006 and 2.3 million tons in 2007 which was the highest level of the decade. Import volume that slightly declined after 2007 was 1.4 million tons in 2012 and 1.6 million tons in 2013. It is estimated that the volume of wheat imports will be around 1.5 million tons in 2014. Corn is the second grain that follows wheat in imports. Data from USDA shows that the country imports corn between 650 thousand tons and 900 thousand tons every year. In consideration of corn imports based on years, import volume that was around 804 thousand levels in 2003 declined to 660 thousand ton levels in the latter 3 seasons. Corn imports subject to declines and increases in the recent years reached to 872 thousand tons in 2012 and 950 thousand tons in 2013. USDA estimates that corn imports of the country will amount around 900 thousand tons in 2014.
Data from USDA and FAO show that Tunisia prefers to import wheat rather than flour. The volume of flour imports of the country varies between 2 thousand tons and 5 thousand tons except for 2 years. However, FAO data shows that Tunisia imported high volume of flour for two times between 2003 and 2011, the volume of flour import in 2008 and 2011 amounted 11 thousand tons and 50 thousand tons, respectively.
FLOUR MILLING IN TUNISIA
According to sector data published in the web site of the Office of Cereals of Tunisia under the Ministry of Agriculture, there are 25 flour mills that are active members of Chambre Syndicale, a special organization established by the state in order to bring the flour industry of the country together. 18 of the aforementioned members are located in the vicinity of 4 large ports. Capacity of 8 mills based in the largest city of Tunisia produce 53 percent of the national capacity. The remaining 4 mills are based in Sousse, 3 is based in Sfax and 3 is based in Gabes. Other mills are located in Nabeul, Jendouba, Gafsa and Kasserine cities. Annual milling capacity of these mills is 2 million tons. According the information given to us by Tunisia Millers Association, there are 28 industrial-scale mills in the country. 5 mills of them are now closed. Almost all of these mills are processing other grains as well as wheat and each of these have 400 tons/day capacity. Wheat milling capacity for total of these mills is approximately 23.1 million tons. Again, according the information provided by the association, the amount of milled soft wheat in 2013 is approximately 11.5 million quintal. The leading companies in the sector have quality assurance programs (ISO, HACCP, ...). All of the mills are modern and use the latest Technologies.
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