Egypt's new wheat requirement could delay supplies

CAIRO/ABU DHABI: Egypt, the world's largest purchaser of wheat, has imposed restrictive import requirements, an agricultural authority official told Reuters, alarming traders who threatened to boycott tenders for the politically sensitive commodity.

The new requirement - for a complete absence of ergot, a common fungus found in grains - could disrupt the country's supply chain for bread, traders said.

Wheat is a strategic commodity that has triggered mass riots during even marginal price rises. President Anwar Sadat triggered riots when he cut the bread subsidy in 1977. And when Egyptians rose up against autocrat Hosni Mubarak's rule in 2011, one of their signature chants was "Bread, freedom and social justice".

Egypt's state grain buyer, General Authority for Supply Commodities (GASC), allows for a 0.05 percent ergot level, but the agricultural quarantine authority said all incoming shipments above zero would be barred.

"Any wheat that we inspect that has any level of ergot will be rejected. I am obliged to do this as it would be very harmful if any level of contamination reached plants in Egypt," the head of the central administration of the agriculture quarantine authority, Saad Moussa, told Reuters.

However, GASC said on Wednesday the new ergot requirement was under discussion and that it had not yet changed its tender specifications. Any changes would be announced before the next tender, it said.

But GASC has also said a cargo of French wheat was rejected late last month at an Egyptian port for having marginal traces of ergot.

"With a zero percent ergot rule, no trader would bid in a tender, it would be too risky to make an offer.

It is impossible to guarantee zero ergot," a European trader said.

Both European and Egyptian traders told Reuters they would not participate if the new requirements are applied to upcoming GASC tenders.

"This is something that is impossible to do. There are always traces of (ergot).It's clear that no one would bid in a tender like that," one trader said.