ABU DHABI, UAE (Reuters) — Egypt’s agriculture ministry sent a letter to traders saying it will allow an ergot fungus tolerance level of 0.05 percent in wheat imports, hoping suppliers will make offers in international purchase tenders for the strategic grain.
Disputes about ergot content level have disrupted top buyer Egypt’s wheat imports in recent weeks, leaving traders wary.
Egypt’s state grain buyer GASC cancelled two tenders and bought only a 60,000 tonne cargo of Romanian wheat last week, with suppliers reluctant to make offers. Those who offer are adding a weighty risk premium to prices.
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Egypt’s supply ministry, which includes GASC, has permitted a 0.05 percent tolerance level of ergot in wheat imports.
The agriculture ministry, whose quarantine agency checks imports, had said it would not allow any ergot content and the quarantine agency has rejected a series of shipments for ergot content.
In a bid to win back confidence, the two ministries said verbally wheat shipments can contain up to 0.05 percent of ergot, a common global standard earlier this month.
But written confirmation of a tolerance level had been a major demand from trading companies who had declined to participate in Egypt’s international wheat tenders in past days.
“It is a positive move and what had been requested. But after such serious problems in past weeks, importers will now wait to see if the tolerance policy is applied to shipments which are arriving or have arrived in Egypt,” one European trader said.
Still, some traders said the fact that the letter was issued by the office of the agriculture minister and not by the agriculture quarantine authority presented a problem.
“Nothing has changed. We need a statement from the quarantine authority to be completely covered,” another European trader said.
Documents seen by Reuters last week showed quarantine had rejected a Canadian wheat shipment of 8,000 tonnes purchased by the private sector even after comments made by the agriculture minister stating that up to 0.05 percent of ergot was acceptable.
The quarantine authority has applied stricter measures to other commodities as well.
