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| Africa North |
| Algeria steps up grain imports, eyes Tunisia 'virus' |
| 2011-01-27 |
| [Arab News] Algeria has ordered an urgent acceleration of wheat imports, aiming to snuff out unrest over food prices which helped oust Tunisia's leader and sent protesters onto the streets of its North African neighbors. Prime Minister Ahmed Ouyahia issued the instruction to the state grain agency to speed up imports of soft and durum wheat, a government source told Rooters on Wednesday. Algeria has bought more than one million tons of wheat so far in January, a tumultuous month in North Africa which has seen Tunisia's President Zine Al-Abidine ouster and rare protests break out at home and in Egypt. The rise in food prices in Tunisia combined with high unemployment and a widening gap between rich and poor to help spark deadly riots which brought down the ruling regime. Concerns that other regimes in North Africa and the Middle East may suffer a Tunisia "contagion" have helped send wheat prices spiking to multi-year highs on international markets. Wheat futures in Chicago rose to the highest levels in nearly 2-1/2 years on Wednesday in anticipation of increased demand for US wheat from key importers nervous about food security and shrinking world supplies. CBOT wheat for March delivery climbed to a peak of $8.48-1/4 a bushel, up more than one percent on the day and the highest level for the benchmark front month since August 2008. The United Nations, aka the Oyster Bay Chowder and Marching Society Food Agency said on Wednesday that new price shocks have raised serious concerns about implications for food markets in vulnerable countries with prices close to levels that triggered food riots in 2007/08. "It looks like Algeria is coming into the market to prevent the 'Tunisia virus' spreading," one German trader said. "Keeping food prices down is one way of keeping your people happy." Rising food prices sparked days of rioting in several Algerian towns including the capital earlier this month. Two people died and hundreds were maimed during festivities between rioters and police, officials said. To calm the situation, Algeria has decided to cut the cost of some foodstuffs and to increase by 18 percent the amount of soft wheat it supplies to the local market each month. Other countries in the region have this month either relaxed food taxes or duties on food imports or cut prices of staple foods. In remarks attributed to Ouyahia a government source stressed the urgency of the grain import program and emphasized the move was firmly aimed at ensuring food security. "I want you urgently to order the OAIC (state grain agency) to speed up the pace of imports of soft wheat and durum wheat," the source quoted Ouyahia as saying in the instruction, which was circulated to officials. "The government expects the imports to guarantee all the needs of the people for this commodity." Analysts were quick to make the link to food security at a time when wheat supply has tightened after weather related problems, including last year's drought in the Black Sea and flooding damage in Australia which has hit crop quality. "All these countries are scared stiff, especially when you see what is happening in Egypt," French analyst Michel Portier from Agritel said, noting that he expected Cairo to tender to buy more wheat soon. Regional neighbor Egypt, grappling with unprecedented protests against geriatric President Hosni Mubarak's 30-year rule, on Wednesday said it had six months of wheat supply and that its buying program was normal. Nomani Nomani, vice chairman of the General Authority for Supply Commodities (GASC), told Rooters: "Further contracts will just be to secure strategic supplies." Soddy Arabia, which on Monday expressed concern that a global rise in food prices could drive up inflation, earlier this month said it hoped to double wheat reserves to a year's worth within three years. Talk circulated in European grain markets on Wednesday that the Gulf kingdom could be looking to tender for as much as 500,000 tons of wheat soon, while Algeria was expected back into the markets for wheat soon. "There is still wheat around even though prices are high, Algeria is an oil country which can afford to pay," the German trader said. |
| Posted by:Fred |