Exclusive-Algeria bans France from bidding for wheat imports as relations sour, Reuters sources say

By Gus Trompiz and Michael Hogan

PARIS (Reuters) – Algeria excluded French companies from a wheat import auction this week and asked participating firms not to bid on French-origin wheat, amid renewed diplomatic tensions between Algiers and Paris, trade sources said.

The move, which echoes a dispute three years ago that saw France shut out of its former colony’s wheat auctions for months, could strengthen the recent dominance of Black Sea supplies led by Russian wheat, in the massive Algerian import market.

Algeria is one of the world’s largest buyers of wheat, 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 auctions on Tuesday, in which state grain agency OAIC is estimated by traders to have purchased more than 500,000 metric tonnes.

OAIC auctions are conducted on an optional origin basis, whereby the seller can choose to source the grain from 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 did participate were asked not to propose French wheat as a supply option.

The OAIC did not explain to the firms the reasons for its move, according to the sources, who said it was understood to reflect the entrenchment of diplomatic relations, including over Western Sahara.

The OAIC and France’s foreign trade and agriculture ministries did not immediately respond to requests for comment.

French wheat was not seen as in contention to win business at this week’s auction because of a poor harvest and much higher prices than in Russia, now Algeria’s main wheat supplier.

But the OAIC’s move prevented French firms from potentially supplying other origins, while raising uncertainty about how long such an exclusion could last.

Algeria’s previous split with France three years ago supported the opening of its wheat market to Russia, the world’s largest grain exporter.

Repeated heavy rains have led to the smallest French wheat crop since the 1980s this year. The drop in volume, along with mixed milling quality, will reduce exports from the European Union’s largest wheat-producing country.