Algeria Excludes French Firms from Wheat Import Tender

By Gus Trompiz and Michael Hogan
PARIS (Reuters) – Algeria has excluded French companies from a wheat import tender, requiring that participating firms avoid offering French-origin wheat. This move appears to stem from renewed diplomatic tensions between Algiers and Paris, according to trading sources.

The Algerian state grains agency OAIC stated on Thursday that it conducted a restricted tender based on technical grounds related to industrial needs, emphasizing its fair treatment of suppliers regardless of the wheat's origin.

Algeria is one of the world's largest wheat buyers, historically sourcing most of its imports from France. However, in the last two years, Russia has become the dominant supplier due to influxes of Black Sea wheat into Algeria's extensive import market.

Sources reported that the restrictions resemble an earlier diplomatic dispute that sidelined French companies from Algeria's wheat tenders for months. This recent tension follows France's endorsement of a plan supporting Moroccan sovereignty over Western Sahara, a stance that has angered Algiers, which backs the Polisario Front's push for independence.

On Tuesday, Algeria conducted a regular tender, estimated by traders to purchase over 500,000 metric tons of wheat. OAIC's tenders typically operate on an optional-origin basis, allowing sellers to choose the grain's source from a list of approved origins, including French wheat.

However, sources indicated that this time, French firms were not invited to participate, and non-French companies were instructed not to suggest French wheat. OAIC did not clarify the reasons for this decision, which is perceived as a reflection of the troubling diplomatic relation deterioration, particularly regarding Western Sahara.

France's foreign trade ministry declined to comment, directing inquiries to the agriculture ministry, which has yet to respond.

Due to a poor harvest and significantly higher prices compared to Russian wheat, French wheat was unlikely to compete in this week's tender. Nonetheless, OAIC's action preemptively excluded French firms from supplying wheat, raising uncertainty about the duration of this exclusion.

OAIC affirmed that suppliers meeting technical and commercial requirements would be welcome in future tenders. The previous rift with France three years ago paved the way for increased Russian imports into Algeria, the world's largest wheat exporter.

This year's devastating heavy rains have resulted in the smallest wheat harvest in France since the 1980s, with expected reductions in export volumes from the EU's largest wheat-producing nation.