Algeria's Cereal Harvest Set to Fall 35-40% this Year Due to Drought

Algeria has in recent years harvested the bulk of its needs for durum wheat and barley while depending on imports of soft wheat. (Reuters)
Algeria has in recent years harvested the bulk of its needs for durum wheat and barley while depending on imports of soft wheat. (Reuters)
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Algeria's Cereal Harvest Set to Fall 35-40% this Year Due to Drought

Algeria has in recent years harvested the bulk of its needs for durum wheat and barley while depending on imports of soft wheat. (Reuters)
Algeria has in recent years harvested the bulk of its needs for durum wheat and barley while depending on imports of soft wheat. (Reuters)

Grain importer Algeria expects its cereal production for 2020 to fall 35-40% from last year’s 5 million tons because of drought, the head of its farmers’ union told Reuters.

Algeria has in recent years harvested the bulk of its needs for durum wheat and barley while depending on imports of soft wheat, in large part from France.

“Output will drop by 35-40% due to drought,” the farmers’ union chief Mohamed Alioui said. “Drought has hit all provinces in the east and west, mainly those known for high production.”

Movement restrictions linked to the global pandemic contributed to production falling across the country, forcing farmers to revise down expectations, he said.

Lower output means the government will continue to turn to international markets to supply its 45 million people, he said.

Algeria spends around $1.3 billion annually on cereal imports, and wheat, considered a strategic crop, is subsidized.

The harvest is coming to an end in the southern provinces and will start in the north in the next few days, continuing until the end of August.

“We are disappointed. But we hope there will be abundant rain next season,” said farmer Ali Bakali as he visited his two-hectare wheat farm.

Drought hit most crops with farmers waiting for the government to make good on promises to improve irrigation systems.

“We have no other solutions but to find the solutions that allow us to cope with the drought and its impact on agriculture,” Agriculture Minister Abdelhamid Hamdani said last month as reported by state media.

Only about 600,000 hectares of the 1.4 million that are irrigated are planted with cereals.

The government said it will offer incentives, including removing some administrative procedures, for farmers to grow cereals.

President Abdelmadjid Tebboune on Sunday called for a “revolution” in the production of grains and seeds, urging his government to increase durum wheat output and cut soft wheat imports by adopting modern methods and involving more agronomic engineers.



Japan's Nikkei Falls, Australia and New Zealand Dollars Tumble amid Israel's Strike on Iran

Arrangement of various world currencies including Chinese Yuan, Japanese Yen, US Dollar, Euro, British Pound, Swiss Franc and Russian Rouble pictured in Warsaw, January 26, 2011. REUTERS/Kacper Pempel
Arrangement of various world currencies including Chinese Yuan, Japanese Yen, US Dollar, Euro, British Pound, Swiss Franc and Russian Rouble pictured in Warsaw, January 26, 2011. REUTERS/Kacper Pempel
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Japan's Nikkei Falls, Australia and New Zealand Dollars Tumble amid Israel's Strike on Iran

Arrangement of various world currencies including Chinese Yuan, Japanese Yen, US Dollar, Euro, British Pound, Swiss Franc and Russian Rouble pictured in Warsaw, January 26, 2011. REUTERS/Kacper Pempel
Arrangement of various world currencies including Chinese Yuan, Japanese Yen, US Dollar, Euro, British Pound, Swiss Franc and Russian Rouble pictured in Warsaw, January 26, 2011. REUTERS/Kacper Pempel

The Australian and New Zealand dollars tumbled on Friday as Israel's strike on Iran hammered global stocks and drove investors into safe-haven assets, with domestic bond yields diving to over a month lows.

The commodity-sensitive currencies often track global risk sentiment and tend to take a hit when equity markets slide.

The Aussie plunged 0.9% to $0.6474, having risen 0.5% overnight to as high as $0.6534. It was already showing signs of fatigue as the currency has been unable to break a key resistance level of $0.6550 overnight even as the greenback slid due to another round of soft data.

For the week, it is down 0.3%.

The kiwi dollar dropped 1% to $0.6011. It gained gaining 0.7% overnight, hitting a high of $0.6071. Support comes in around $0.5990, while resistance is at the multi-month top of $0.6080. For the week, it is down 0.1%.

Israel said early on Friday that it struck Iran. Oil prices jumped over 6%, Wall Street futures dropped over 1%, while safe-haven currencies like the Japanese yen and Swiss franc rose.

Local bonds also rallied. Australia's ten-year government bond yields slid 11 basis points to 4.133%, the lowest since May 1, while New Zealand's ten-year government bond yields dived 8 bps to a six-week low of 4.529%.

Sean Callow, a senior analyst at ITC Markets, said the trend for the Aussie is still up given the pressure on the US dollar from a sluggish US economy and investor unease over the U. policy outlook.

"Investors are likely to expect that Israel's strikes will be contained to a relatively short period, not something that will dictate market direction multi-week," he said.

Also, Japan's Nikkei share average fell on Friday, mirroring moves in US stock futures, oil and other stock markets on news that Israel had conducted a military strike on Iran.

As of 0106 GMT, the Nikkei was down 1.5% at 37,584.47.

The broader Topix fell 1.28% to 2,7473.9.

"The market was selling stocks on caution for geopolitical risks, but the news was not driving a fire sale because investors still wanted to monitor the development of the attacks," said Naoki Fujiwara, a senior fund manager at Shinkin Asset Management.

Chip-making equipment maker Tokyo Electron fell 5.5% to drag the Nikkei the most. Uniqlo-brand owner Fast Retailing lost 2.1%.

Exporters fell as the yen strengthened, with Toyota Motor and Nissan Motor falling 2.75% and 1.5%, respectively.

All but three of the Tokyo Stock Exchange's 33 industry sub-indexes fell.

Energy sectors rose as oil prices jumped, with oil explorers and refiners gaining 3.6% and 2.2%, respectively.

The utility sector rose 0.7%.