Algeria orders speeding up of wheat imports

ALGIERS (Reuters) - Algeria is to urgently speed up grain imports, a government source told Reuters, in a move to head off potential unrest over food prices at a time protests are sweeping North Africa.

Energy exporter Algeria had a wave of violent protests at the start of this month over price rises for cooking oil and sugar, and since then unrest has toppled the ruler of neighbouring Tunisia and rioting has broken out in Egypt.

Bread is a staple for Algeria's 35 million population and to control prices the government subsidises the food and imports grain through the state grain agency.

Algerian Prime Minister Ahmed Ouyahia issued an instruction on January16 to the agency to speed up imports of soft and durum wheat, said the government source, who has seen the instruction.

"I want you urgently to order the OAIC (state grain agency) to speed up the pace of imports of soft wheat and durum wheat," the source quoted Ouyahia as saying in the instruction, which was circulated to officials.

"The government expects the imports to guarantee all the needs of the people for this commodity," he said. The Algerian prime minister also asked the OAIC to stagger the imports because of limited local storage capacity.

The instruction gave no details on how much wheat would be imported or over what time period.

Wheat futures in Chicago rose to the highest levels in nearly 2-1/2 years on Wednesday in anticipation of increased demand for U.S. wheat from key importers nervous about food security and shrinking world supplies.

CBOT wheat for March delivery climbed to a peak of $8.48-1/4 a bushel, up more than one percent on the day and the highest level for the benchmark front month since August 2008.

WORLD NO.4 IMPORTER

Algeria is expected to be the world's fourth largest importer of wheat in the 2010-11 season, according to figures issued earlier this month by the International Grains Council.

It has been on a grain buying spree over the past month, purchasing more than 1 million tonnes of grain.

Some analysts and an Algerian agriculture sector source have said the country was securing supplies to guard against potential unrest, especially in the light of events in Tunisia, where President Zine al-Abidine Ben Ali was overthrown.

In his instruction, the Algerian prime minister said more wheat imports were needed because of the tightness of supply on the international market and uncertainty about the size of the domestic harvest this season.

But until the start of this month, agriculture officials had said grain stocks were high and they have been forecasting a strong harvest.

(Source: http://af.reuters.com/article/investingNews/idAFJOE70P0BF20110126)