Algeria leads in dry milk powder

Algeria is one of the leading consumers and importers of dry milk powder worldwide, notes Nabila Hales, an analyst at the US Department of Agriculture’s Foreign Agricultural Service (FAS) and part of the Global Agricultural Information Network. Its government has prioritised improving Algeria’s dairy domestic production to reduce reliance on imports. In line with this strategy,  Algeria imported less milk powder in 2021.

The FAS anticipates that consumption and imports of dairy powder will remain stagnant in 2022 and 2023, but that the government’s focus on modernising and expanding the dairy sector presents investment opportunities.

Algeria’s dairy cattle herd produces 2.5 million metric tons (MMT) of fluid milk per year, while market needs are estimated at 4.5 MMT. However, only 55% comes from domestic production. Three years ago, the Algerian dairy buying agency (ONIL) estimated the national annual consumption of milk at 145 litres per capita, which is 55 litres per year more than the world average of 90 litres per year per capita as estimated by the Food and Agriculture Organization (FAO).

Dairy products remain the second most consumed staple food product in Algeria after cereals. Despite recent increases in fresh milk production, most of the milk sold in Algeria is reconstituted from dairy powder. Milk is sold on the local market as two main products; pasteurised reconstituted milk in small bags of one litre with 24-hour shelf-life at a government fixed price of AD25 ($0.178); and UHT in Tetra Pak boxes at the market price.

Giplait, the state-owned company is the leader in the pasteurized, reconstituted milk market with 60% of the market. Because of the low fixed prices for pasteurized fluid milk, the private sector has typically played a major role in the production of processed dairy products – yogurt, cheese, butter, sour milk, and dairy desserts.

The forecasts are in 2023, consumption of skim milk powder and full fat milk powder will remain flat on the 2022 levels, because the sector is saturated and there are no new agreements to construct new dairies, nor expand the existing processing facilities.

As a result, the government of Algeria (GoA) has implemented several different programmes to boost milk production. The GoA provides more than US$129 million in annual subsidies to breeders, milk collectors, and processors as well as subsidies for calf birth, veterinary coverage, and vaccination against foot-and-mouth disease (FMD).

In 2022, the government launched a new programme to restock dairy cows to improve milk production and reduce powder imports. The ministry of agriculture says there is a need for 400,000 dairy cows and plans to import these over the next two to three years.

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