Tunisia Pays Wheat Bills from International Bank Sources
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Tunisia subsidizes Wheat consumption, guaranteeing the entire population access to Wheat flour, semolina, and bread at prices below market rate. Bread prices are a sensitive issue, and as a result, Wheat subsidies have remained unchanged despite the extreme burden they place on the state budget. Tunisian officials and private sector contacts are unanimous in their opinion that Tunisian Wheat consumption is strongly inelastic and that despite budgetary concerns, global supply shortages, and global inflation, Tunisian Wheat consumption will not decline.
Post expects Tunisian Wheat imports to reach 2.2 MMT in MY 2023/24 based on inelastic consumption, stable stock levels, and below-average production. Post maintains the MY 2022/23 import estimate at 1.8 MMT. Tunisia’s fragile economic situation has weakened the Office of Cereals’ ability to import Grains. Amid concerns regarding Tunisia’s ability to pay for the much-needed imported Wheat in MY 2021/22 and MY 2022/23, Tunisia obtained funding and grants from international institutions and donors (World Bank, European Union, African Development Bank, and others) to fund some of the Wheat and Barley shipments.
Industry contacts report that Tunisian import demand will remain inelastic. Post’s import estimate assumes that Tunisia will maintain stocks equivalent to approximately two months’ supply, i.e., the minimum quantity necessary to ensure an uninterrupted supply chain. Tunisia imports Wheat primarily from the E.U. and Black Sea countries.
The Russian invasion of Ukraine has cut Tunisia off from its primary Wheat supplier, exacerbating an already difficult situation. Before the invasion, Tunisia faced high freight prices, a drought across North Africa that increased demand for Wheat imports, and a fragile economic situation that weakened the Office of Cereals’ ability to import Grains efficiently.
With the loss of Black Sea suppliers, Tunisia will now be forced to bear the additional costs associated with the loss of approximately 30 percent of the world’s exportable Wheat supply. Despite concerns regarding Tunisia’s ability to pay for imported Wheat in 2022/23, industry contacts report that Tunisian import demand will remain inelastic. Post’s import estimate assumes that Tunisia will maintain stocks equivalent to approximately three months’ supply, i.e., the quantity necessary to ensure an uninterrupted supply chain.
Tunisia has historically imported Wheat from Ukraine, Russia, the EU, and Canada. Estimated market share, based on a five-year average, shows the following: Ukraine (48%), Russia (8%), the EU (34%), and Canada (8%). According to AgFlow data, Tunisia imported 0.7 million tons of Wheat in Jan – Jun 2023. In June, key suppliers were Russia (44,500 tons), France (27,500 tons), Canada (27,500 tons), and Bulgaria (11,000 tons).
Tunisia’s Cereal Board controls imports and exports of Wheat and Wheat products. As the monopoly importer, all Cereal Board Wheat tenders are destined for domestic use. Imported Wheat is sold on the market at a subsidized rate, and the Tunisian Government covers the difference. Despite concerns that the Wheat subsidy is becoming too expensive for the Tunisian budget, there is no indication that the subsidy program will change or that imports will decrease. Private millers may import Wheat under a temporary admission regime but must export the finished product after milling occurs in Tunisia. Exports of Tunisian Wheat products require an export license.
Barley Consumption in Tunisia
Tunisia’s Barley consumption in MY 2022/23 is forecast at 1.355 MMT, reflecting the same average growth trend of roughly two percent. Barley is consumed mainly in feedlots and as supplemental feed, especially when rangelands are stressed. Ag Attaché crop survey indicates that rangeland for Tunisian sheep and goats is in average condition. April rains will determine the viability as a feed source for MY 2022/23.
Other sources: USDA
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