Algerian Dairy Market Faces Ongoing Uncertainty

In light of receding prices across key dairy markets – including the European Union, New Zealand, and South America – industry insiders predict an impending influx of new dairy tenders. However, the finalization of import derogations remains an ongoing issue, inhibiting the tender issuance process; Algerian market participants, in particular, cannot release tenders without the derogation.

These same sources maintain that a new tender is on the horizon, likely materializing towards the latter half of July or early August, contingent on the continuation of the current downswing in international Skimmed Milk Powder (SMP) markets. The potential impact of a new milk powder tender on European SMP prices is uncertain, primarily due to concerns over halal certification. The current spot market remains lopsided, with supply significantly outstripping demand; whether the introduction of tender size can redress this imbalance remains to be seen, though sources suggest it’s improbable.

As the market hints at the possibility of a new tender, the ambiguity over the necessary halal certification persists. Following the earlier implementation of a halal certification prerequisite for EU exports, the exact process for securing certification remains unclear. According to recent reports, it appears EU processors must engage in a contractual agreement with the Great Mosque of Paris to facilitate a seamless process.

One processor voiced their concerns, stating, “The problem with certification is the ongoing uncertainty. The latest intel suggests we may need to sign a contract with the Great Mosque of Paris. This adds a substantial level of unpredictability to the market, leaving us unsure of whether we can partake in any upcoming tenders.”

Meanwhile, a trader remarked, “Although it seems certain that processors can secure the necessary certification via a contract with the Great Mosque of Paris, it’s unclear how this will apply to traders. If the status quo persists, our ability to bid on any Algerian-issued tenders will be questionable.”

Adding to the EU market participants’ anxiety is the fact that only EU suppliers are required to produce halal certification, a requirement not imposed on their counterparts in New Zealand or South America.

Mintec will maintain a close watch on this unfolding situation and provide regular updates in the ensuing weeks.