By Gus Trompiz and Michael Hogan
PARIS (Reuters) – Algeria excluded French companies from a wheat import tender this week and required that participating firms did not offer French-origin wheat, in apparent fallout from renewed diplomatic tensions between Algiers and Paris, trading sources said.
The move, echoing a dispute three years ago that led to France being sidelined from its former colony’s wheat tenders for months, may reinforce the recent dominance of Black Sea supplies, led by Russian wheat, in Algeria’s massive import market.
Algeria is one of the world’s biggest wheat buyers and for many years France was by far its largest supplier.
France’s decision in July to back a plan for the Western Sahara region under Moroccan sovereignty angered Algiers, which supports the Polisario Front’s quest for an independent state there.
Algeria held one of its regular tenders on Tuesday, in which state grains agency OAIC is estimated by traders to have purchased over 500,000 metric tons.
OAIC’s tenders are held on an optional-origin basis, under which the seller can choose the source of the grain within a range of approved origins including French wheat.
But six sources familiar with the matter said that this time French firms did not receive an invitation to participate, while non-French companies that took part were asked not to propose French wheat as a supply option.
OAIC did not explain to firms the reasons for its move, according to the sources, who said it was understood to reflect the souring of diplomatic relations, including over Western Sahara.
OAIC and France’s foreign trade and agriculture ministries did not immediately respond to requests for comment.
French wheat had not been seen as in contention to win business in this week’s tender due to a poor harvest and much higher prices than in Russia, now Algeria’s main wheat supplier.
But OAIC’s move prevented French firms from potentially supplying other origins while raising uncertainty over how long such an exclusion might last.
Algeria’s previous rift with France three years ago supported the opening of its wheat market to Russia, the world’s biggest exporter of the cereal.
Repeated heavy rain led to the smallest French wheat harvest since the 1980s this year. The plunge in volume, coupled with mixed milling quality, is set to slash exports from the European Union’s biggest wheat-producing country.
This post is originally published on INVESTING.
