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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed


31 October 2012

USDA GAIN: Algeria Grain and Feed Update October 2012USDA GAIN: Algeria Grain and Feed Update October 2012

U.S. wheat exports have increased through the first seven months of CY 2012. Algeria has suspended import duties and VAT on animal feed inputs and co-products, including corn, DDGS, and corn gluten feed (CGF) as well as soybean meal.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Production

Due to extreme heat during July and August, coupled with fires in agricultural production areas, the Ministry of Agriculture (MoA) has revised its preliminary total grain production forecast from the 5.6 million metric tons (MMT) it announced in June to 5.2 MMT. Thus far, MoA has not provided an official breakdown between soft (bread) and hard (durum) wheat production.

Trade

CY 2012 wheat imports through July show a 17-percent decrease, compared to the same period in CY 2011. Total wheat imports from January to July CY2012 reached 3.6 MMT ($1.17 billion) of which durum reached 903,696 MT ($385 million) and bread wheat totaled 2.7 MMT ($792 million) versus a total 4.59 MMT ($1.75 billion) in the same period in CY 2011. CY 2012 imports are forecast well-below CY 2011 imports due to increased production. However, it currently is not clear whether Algeria’s CY 2012 imports will tick up with the downward revision in CY 2012 production or OAIC will defer purchases due to high world prices and tight supplies.

France remains the top wheat supplier to Algeria for the first seven months of CY 2012 and commands a large portion of the bread wheat (47 percent) and durum (11 percent) markets followed by Canada (19 percent) and Argentina (16 percent). The U.S. share in the wheat market has recovered to a 7-percent share of the total wheat from January to July CY2012, with 3-percent share for durum and a 9-percent share for bread wheat. The U.S. market share for durum fell from 17 percent in CY 2010 to only 3 percent in CY 2011. U.S. wheat and other products face stiff competition from European suppliers due to price competitiveness and shipping flexibility.

Policy

In response to increasing international feed prices, the Government of Algeria (GoA) has suspended import duties and VAT on animal feed inputs and co-products, including corn, dried distiller’s grains with solubles (DDGS), and corn gluten feed (CGF) as well as soybean meal. The GoA took this action to curb inflation by moderating expected increases the price of animal products, particularly meat and poultry. Previously, the import duty and VAT for corn was 5 percent and 7 percent and for DDGS and CGF it was 30 percent and 17 percent respectively. As a result, it is expected that imports of U.S. feed grain and DDGS could increase.

October 2012

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