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Bloomberg Business: Boycott of Top Wheat Market Pressures Egypt to Loosen Rules

Egypt has been coming and going on its Ergot tolerance rules.
20.09.16 | Interesting article at Bloomberg Business

After three failed attempts to buy wheat, Egypt is under pressure to loosen its rules for grain imports or face an extended boycott from international traders.
Egypt’s state-run buyer had to cancel a tender on Monday as trading firms refused to participate after the country reinstated a ban on a common type of fungus known as ergot and rejected cargoes. Authorities are now reviewing their policy on ergot in wheat shipments, according to a government official, who asked not to be identified because the talks are private.
“They will probably return to the terms that existed before,” said Vadim Sarkisov, director of Russia’s largest grain exporter OOO Trading House RIF, by phone from Rostov-on-Don.
Egypt is closely watched by the grain market because it buys more wheat than any other country to supply a subsidized bread program. Officials have gone back and forth with regulations over ergot this year, sowing confusion in the market and leading to fewer offers and higher prices at the tenders.
Zero Tolerance
The canceled tender was for shipment between Oct. 16 and 26. Egypt, which checks every cargo it buys at loading ports, has stockpiles to meet demand for more than six months, the Supply Ministry said Aug. 31.
“As long as there is a zero tolerance, GASC will continue to struggle booking wheat,” said Benjamin Bodart, a director at adviser CRM Agri-Commodities in Newmarket, England. “Exporters will simply not take the risk to get rejected.”