|
 Saad Moussa, the head of the agricultural quarantine agency, refuses
to let in a single grain of wheat infected with ergot, a common
fungus that can lead to hallucinations and irrational behaviour in
large quantities but at trace levels is of no harm to humans.
Confusion over Egypt's position on ergot levels has disrupted wheat
tenders, raising the possibility of a shortage of grain which could
pose a political problem for President Abdel Fattah al-Sisi as the
impoverished population relies on highly subsidised bread.
Officials at Moussa's quarantine authority use a 2001 regulation,
which Reuters has seen, stipulating zero tolerance for ergot as
their main guide, according to a quarantine official who declined to
be named. They first used the rule to reject a wheat shipment in
December.
Moussa, who did not respond to repeated attempts to contact him for
this story, told Reuters in January: "Any wheat that we inspect that
has any level of ergot will be rejected...it would be very harmful
if any level of contamination reached plants in Egypt."
Moussa reports to Agriculture Minister Essam Fayed but a spokesman
for the agriculture ministry said he had no knowledge of the 2001
regulation Moussa was relying on.
"I don’t know anything about this topic, the last thing I have is
what was announced by the agriculture minister and the minister of
supply that they would accept 0.05 percent," spokesman Eid Hawash
said.
Officials at the Supply Ministry were not available for comment for
this story.
Most Egyptian officials follow a different specification issued in
2010 by the Egyptian Organization for Standardization and Quality
allowing trace levels of 0.05 percent, the common worldwide standard
and the one stipulated by Egypt's grain-importing body, the General
Authority for Supply Commodities (GASC).
"I am bound by the Egyptian specifications," Mamdouh Abdel Fattah,
vice chairman of GASC, told Reuters when asked about the
contradiction between the two, stressing that the 2010
specifications are more recent than the 2001 regulation and is
accepted internationally.
TWO DECISION MAKERS
Panic began to spread among traders after a 63,000-tonne French
wheat shipment purchased by GASC was rejected by the quarantine
agency in December for containing trace levels of ergot.
GASC was forced to cancel two tenders after rattled traders and
suppliers stayed away, uncertain that their shipments would be ergot
free and fearing the heavy cost of having a shipment rejected.
After weeks of confusion Minister Fayed and Supply Minister Khaled
Hanafi tried to reassure the market in a joint press conference on
February 7 that Egypt would accept all shipments with less than 0.05
percent ergot.
The following day Moussa's agency rejected a shipment of Canadian
wheat, further baffling the market
"This was a big surprise. It was one day after the TV announcement
of both ministers...and all of a sudden the vessel is rejected. So
do we have two different decision makers in the same (agriculture)
ministry?" the Cairo-based trader said.
[to top of second column] |
According to documents seen by Reuters, the shipment had a far lower
ergot reading than 0.05 percent.
The lack of successful sales prospects to a huge buyer along with
record global wheat supplies has weighed on Benchmark global grain
prices and curbed export prospects for European Union producers.
That should have created ideal conditions for Egypt to buy wheat at
great prices.
INCALCULABLE RISK
GASC successfully purchased 300,000 tonnes of wheat last week. But
with less than half the usual number of suppliers opting to make
bids during the tender, the uncertainty was still front and centre.
"The risk is still incalculable," said a Cairo-based trader that sat
out of the tender, echoing the sentiment of several others reached
by Reuters.
All traders interviewed for this story asked to remain anonymous.
Wheat traders are generally banned from speaking to the media by the
companies they represent.
Traders who sat out the latest tender said they would remain on the
sidelines, at least for now.
"(Moussa's) definitely not changed his mind at all -- he's even
lobbying all the research centres in the country and now they are
all convinced with the zero," said another trader.
Egypt will announce the results of its latest tender for an
unspecified amount of wheat from global suppliers for shipment from
April 5-14 after 3:30 p.m. local time (1330 GMT) on Wednesday.
Hanafi said on Friday Egypt has enough wheat supplies to last until
the middle of June. But should the crisis deepen, it could hurt
Sisi's credibility at a time of waning popularity and with the
economy struggling after years of political turmoil.
The former army chief faced tough criticism last week by Egyptians
on social media after he delivered a long television speech on his
vision for the future.
Any Egyptian leader knows ample supplies of low-cost bread are key
to maintaining stability.
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".
(Editing by Michael Georgy and Anna Willard)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
