Market News & Headlines >> Egypt Reassures Wheat Exporters in Writing
Egypt's Agriculture Ministry has sent a letter to grain traders saying it will allow an ergot fungus tolerance level of 0.05% in wheat imports in an effort to draw suppliers back to import tenders by its main government wheat buyer, GASC.
Disputes over the ergot tolerance level have left exporters wary of bidding in the GASC tenders. After earlier rejecting a shipment of French wheat due to ergot levels which supplier Bunge Ltd. says were below the 0.05% tolerance specified in the import contract, Egypt’s agricultural quarantine bureau reportedly rejected a cargo of Canadian wheat because of the presence of low levels of ergot on Feb. 8.
The rejection of the Canadian wheat came one day after Egypt’s agriculture and supply ministries held a joint news conference, where they reassured exporters that the 0.05% ergot tolerance level remained in effect.
The agriculture ministry letter, seen by Reuters News Service, was distributed by GASC to traders on Wednesday and was issued by the office of the minister of agriculture on Feb. 15.
GASC cancelled two tenders of its past three tenders and managed to purchase only a 60,000-metric-ton cargo of Romanian wheat in a Friday tender, with suppliers reluctant to make offers. Those who did offer added a significant risk premium to their prices.