However, in the period January to November 2015, Algeria imported 340,316t of milk powder – down just 2% from the volume imported in 2014. Within that, WMP imports were actually up 8%, totalling 209,717t, with the deficit resulting from SMP imports, which were down 19%.
The dichotomy between the declines in value and volume is due to declining dairy commodity prices. In January 2014, the price of WMP imported by Algeria averaged US$5153/t, and SMP US$4359/t. By November 2015, the average price of WMP imported by Algeria dropped to US$2965/t and SMP US$2383/t.
According to a recent Euromonitor report, Algeria is the largest dairy consumer in the Maghreb region and one of the world's biggest importers of milk powder (ranked second behind China). The Oxford Business Group reports that Algeria still imports 28% of its food needs, particularly cereals and milk, which make up the bulk of food imports.
Euromonitor reports that the Algerian government is aiming to reduce imports of powder milk and dairy products. It is supporting the industry by subsidising drinking milk and providing incentives in the areas of breeding, production, processing and distribution, thus helping to ensure the steady growth of drinking milk products in Algeria.
Algeria has been aiming to reduce its reliance on imports and support domestic manufacture. Aside from the support offered to the dairy industry outlined above, the Algerian government also has a series of incentives targeting domestic and foreign investment. Several incentives are specifically aimed at increasing capital inflows into manufacturing and processing, by helping to cut the cost of doing business.
However from a New Zealand perspective, this is not all doom and gloom. Algerian imports of milk powder from NZ have in fact increased 62%. Between January and November 2015, NZ supplied 143,484t of milk powder to Algeria and was Algeria’s largest supplier, surpassing France and Argentina, which were larger suppliers in 2014. Exports of milk powder from France to Algeria have also grown, but only by 5%, reaching 61,000t over the January to November 2015 period. Argentina’s exports, on the other hand, have dropped to just 19,000t over this same period, having exported 59,000t to Algeria in the 11 months to November 2014.
