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.



Gold Jumps, on Track for Best Week in Over a Year on Safe-haven Demand

FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo
FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo
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Gold Jumps, on Track for Best Week in Over a Year on Safe-haven Demand

FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo
FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo

Gold prices rose over 1% to hit a two-week peak on Friday, heading for the best weekly performance in more than a year, buoyed by safe-haven demand as Russia-Ukraine tensions intensified.

Spot gold jumped 1.3% to $2,703.05 per ounce as of 1245 GMT, hitting its highest since Nov. 8. US gold futures gained 1.1% to $2,705.30.

Bullion rose despite the US dollar hitting a 13-month high, while bitcoin hit a record peak and neared the $100,000 level.

"With both gold and USD (US dollar) rising, it seems that safe-haven demand is lifting both assets," said UBS analyst Giovanni Staunovo.

Ukraine's military said its drones struck four oil refineries, radar stations and other military installations in Russia, Reuters reported.

Gold has gained over 5% so far this week, its best weekly performance since October 2023. Prices have gained around $173 after slipping to a two-month low last week.

"We understand that the price setback has been used by 'Western world' investors under-allocated to gold to build exposure considering the geopolitical risks that are still around. So we continue to expect gold to rise further over the coming months," Staunovo said.

Bullion tends to shine during geopolitical tensions, economic risks, and a low interest rate environment. Markets are pricing in a 59.4% chance of a 25-basis-points cut at the Fed's December meeting, per the CME Fedwatch tool.

However, "if Fed skips or pauses its rate cut in December, that will be negative for gold prices and we could see some pullback," said Soni Kumari, a commodity strategist at ANZ.

The Chicago Federal Reserve president reiterated his support for further US interest rate cuts on Thursday.

On Friday, spot silver rose 1.8% to $31.34 per ounce, platinum eased 0.1% to $960.13 and palladium fell 0.6% to $1,023.55. All three metals were on track for a weekly rise.