Algeria Secures 690,000 Tonnes of Wheat for $187.7 Million Amid Market Volatility
Image: TSA
Takeaway
The shift in Algeria's wheat sourcing strategy away from France and towards the Black Sea region presents opportunities for grain exporters in Ukraine, Romania, and Bulgaria. However, investors should be aware of the political and logistical risks associated with these supply chains. Companies like Soufflet and Glencore, which have historically been major players in Algerian grain imports, may need to adapt their strategies to maintain market share.
Algeria's state grain agency, Office Algérien Interprofessionnel des Céréales (OAIC), purchased approximately 690,000 tonnes of milling wheat in an international tender that closed on March 26. The purchase price averaged $272 per tonne, cost and freight included, totaling approximately $187.7 million. This acquisition aims to bolster the country's wheat reserves and stabilize the national grain market amidst international uncertainties.
Algeria, one of the world's largest wheat importers, is strategically enhancing its food security. In 2021, diplomatic tensions with France led Algeria to diversify its wheat suppliers, increasing procurement from Black Sea countries like Ukraine, Romania, and Bulgaria. This shift followed Algeria's decision not to renew wheat import contracts with France, which previously accounted for nearly 40% (3.2 million tonnes annually) of Algeria's wheat imports until 2020. The government established the National Scientific Council for Food Security in October 2025 to improve the agricultural sector's resilience through scientific research and technological integration.
The current tender far exceeds the typical minimum of 50,000 tons, signaling strong demand. Shipments are scheduled in two periods: June 1-15 and June 16-30; however, shipments from South America or Australia are expected one month earlier. Historically, bread wheat has constituted 75-80% of Algeria’s total wheat imports, while durum wheat accounts for 20-25%. In the 2023/24 marketing year, Algeria imported approximately 9.5 million tonnes of wheat.
Traders anticipate that the majority of the purchased wheat will originate from the Black Sea region. Ukraine exported approximately 388,000 tons of wheat in March 2026, with Algeria being the main buyer, accounting for about 40% of all shipments. This concentrated reliance on a single market, however, creates a dependency for Ukrainian farmers on the tender policies of North African countries, increasing risks for the industry.
Market participants will be closely monitoring the final volumes and origins of the wheat as negotiations continue. The USDA forecasts Algeria's wheat imports to remain above 9 million metric tons for the current and next season. Algeria aims to discontinue all durum wheat imports starting in 2026, following what the Agriculture Minister described as an 'excellent' harvest in the 2025/26 season. The government allocated 764.2 billion dinars (~$5.84 billion) to its agriculture sector under the 2026 Finance Bill, a 4% increase from the previous year.