January 25, 2012

Algeria imports US$9-billion worth food for 2011

Algeria imported about US$9 billion on food for the previous year, a substantial surge compared with 2010.

Commodity prices have increased, but there was also growth in the volumes purchased.

According to the country's trade minister, Mustapha Benbada, the growth was due to the rise in food prices in the international market. "We ended 2011 with US$9 billion on food imports, US$4 billion in cereals. The prices of these products had risen between 30% and 120%, "said the minister.

The increase in the volume of imports is also because the country decided to purchase additional quantities of grain to stocks and to ensure supplies to the local market. At the beginning of last year, the Algerian government decided to drop the import tax on certain foods to avoid shortages and soaring prices. Benbada said the average price of grain rose from US$200 per tonne in 2010 to US$500 in 2011.

"This increase, although conjuncture, cost the state a lot of money," said the minister, adding that it is necessary to create mechanisms to prevent such sharp increases. Foods represent 20.8% of Algerian imports. On the advance of domestic prices, Benbada said that "it is a matter of supply and demand."

"The supply decreased in the period between harvests and prices rose because of a failure with regard to storage," he said. "So when the next harvest starts to hit the market in March, prices will stabilise," he added.