Algeria’s Economy and Soft Commodities Market: An Analysis of Broker–Buyer Relationship

Abstract

Trading soft commodities has become increasingly challenging with less liquidity in the market, making it very risky and even more costly. Ongoing geopolitical instability, climate change, complex supply chain and fluctuation in demand and supply resulted in a continued price volatility and market uncertainty. Soft commodity trading businesses are under an increasing pressure to adapt to political, economic and social changes. Therefore, this study explores the relationship between brokers and their buyers in the Algerian soft commodities market, with a particular focus on cereals (wheat) products. This study is based on the analysis of secondary data collected from various sources and anecdotal evidences from brokers of soft commodities in Algeria. The overall strategy of Algeria is to limit its reliance on imports. However, political dysfunction coupled with economic instability appears to discourage domestic and foreign investment and inhibit the development of this soft commodities sector. The brokerage firms of soft commodities (wheat, oils, milk powder, rice, coffee, etc.) are operating in a niche market within an environment of intense competition and highly demanding buyers. The striking success of the brokerage function depends on a close relationship formed between the actors (broker, seller and buyer).

Citation

Rebbah, R.E. and Beloucif, A. (2021), "Algeria’s Economy and Soft Commodities Market: An Analysis of Broker–Buyer Relationship", Nziku, D.M. and Struthers, J.J. (Ed.) Enterprise and Economic Development in Africa, Emerald Publishing Limited, Leeds, pp. 293-313. https://doi.org/10.1108/978-1-80071-322-220211018