ABU DHABI/CAIRO: Suppliers chose to hold off on making offers in Egypt's international purchasing tender on Thursday, saying they needed more guarantees that the country's import authorities would tolerate negligible levels of the ergot fungus in their supplies.
State grain buyer GASC said earlier on Thursday it had amended its tendering booklet outlining terms and wheat specifications to allow for a 0.05 percent ergot content, a common international standard, instead of a previous absolute zero tolerance rule which had deterred suppliers.
The world's largest wheat buyer is holding its first tender under the new ergot rules, having effectively cut itself off from foreign supplies by banning imports containing any trace of ergot whatsoever. Egypt is tapping the global grain market for wheat to be shipped Oct. 21-31, having failed in its three previous tenders.
Ergot can cause hallucinations when consumed in large amounts but is considered harmless in low quantities. GASC announced its tender after a cabinet statement that outlined the new policy and stated that no more delegations would be sent abroad to ports of origin to inspect wheat cargoes.
The government said on Wednesday it would return to a 2010 law that adopted the international 0.05 percent standard, but traders noted this did not address the zero tolerance insisted upon by the Agriculture Ministry's import quarantine rules.
But there has been no official decree issued yet by the prime minister, which some traders say is a must before they submit any offers.
"Nothing is submitted yet (bids) because no one has yet seen the prime minister's decree. It hasn't yet been sent here to the ministry of supply, so we're waiting," one Cairo-based trader said. Another trader also said a change in the quarantine rules is a must.
"The GASC change is good but what about the rules for the Agriculture Ministry? No one has produced a formal decree for that yet," one Cairo-based trader said.
GASC and the ministry clashed earlier this year over their different approaches.
Several traders told Reuters they would not tender supplies on Thursday given the continued uncertainty of how the rules would be applied. Some estimated no more than three suppliers would offer, if any.
The agriculture ministry's spokesman was not available for immediate comment.
Other suppliers worried that scrapping a provision that sent Egyptian officials abroad to inspect wheat before it arrived would further increase the risk of rejection on arrival in Egypt. "If it were for me, I would send a delegation anyway because it is better than handling a rejection on arrival," a third trader said.
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