North Africa is struggling with the prospect of reduced cereal harvesting. Statisticians in Morocco have been progressively reducing the country’s economic growth as a result of a drought that is affecting agriculture production. Algeria is not spared and it is expected to dig deeper into its coffers to import large amounts of wheat and other cereals. [membersonly]
Although the final figure of the nation’s expected harvest this year is not official yet, the minister of agriculture spoke of a harvest of 3 million tons. If that figure is confirmed, that would mean a near 27% reduction from last year output of 4.1 million. Algeria’s cereal production has had a rocky profile over the past five years and with the exception of a recovery of +20.8% in 2011, production has been on the down slop.
To make matters worse, Algerians are big consumers of cereal, with national consumption estimated at 8 million tons. And so for the remaining 5 million tons, Algeria is expected to tap into import to satisfy national demand, in particular for soft wheat and to a lesser extent hard wheat.
Strong Imports Already Underway:
Already Algeria has been buying large volumes of cereals. Just for the first five months of this year, the country imported 3 million tons of wheat. This was a 25% increase year on year. If such trend continues, Algeria might have to spend more of its average cereal import value of about $4 billion per year to deal with its deficit. We note that Algeria’s cereal import budget consumes some 40% of its total import value of food and agricultural products, which averages about $10 billion per year.
Algeria’s weak cereal performance is largely due to its heavy dependence on rain occurrences and lack of solid irrigation systems. Only 3% of the output comes from areas that have modern irrigation systems and are therefore not dependent on volatile rain activity. Experts say that Algeria should expect volatility and swings in production over periods of one to five years. They note that over the past 40 years, the country had its most disastrous year in 1994, fetching less than a million ton, and a record of 6.1 million tons in 2009. These swings are the results of volatile rain patterns and lack of preparedness in the agricultural sector.
Algeria’s cereal producing land is underperforming with production per hectare not exceed 1.35 tons. A series of factors conspire to make Algeria’s productivity one of the lowest in the world, including natural climate, farming techniques used and untrained farmers. While some agriculture officials are betting that the country will be self-sufficient by 2020, independent Analysts forecast Algeria will continue to depend on imports for 70% of its soft wheat in 2020.