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Future of Egypt's wheat supplies hangs on FAO analysis

CAIRO, March 16, 2016

Egypt will allow wheat imports with trace levels of the common ergot fungus, the country's agriculture minister said, while government agencies try to resolve a dispute that has disrupted shipments to the world's biggest wheat buyer.

Essam Fayed also told Reuters that no timeframe had been given to an official from the United Nations Food and Agriculture Organization (FAO), drafted in to resolve the row on a scientific basis.

"I will not pressurise anyone," Fayed said in an interview in the UAE capital Abu Dhabi, where he was on an official visit.

"I have been following up to make sure it is done as soon as possible but it takes time and I can't tell you how long it will take at the moment," he said.

Fayed's stance on fungus tolerance levels in imports is in direct contrast to that of quarantine officials who say no level of ergot is allowed in shipments until legislation changes.

The conflict between Egypt's agricultural quarantine authority and the agriculture and supply ministries over the level of allowed ergot, a common grain fungus, in wheat imports has led to a series of shipments to the world's largest importer being rejected and a crisis in confidence with global suppliers.

Traders have continued to vote with their feet as offers to sell wheat in tenders have fallen dramatically. In a tender on Wednesday, state grain buyer's GASC only received six offers of wheat compared to an average of around 15 prior to the crisis.

Saad Moussa, the quarantine agency's former chief, who was replaced on March 6, followed a 2001 regulation governing the authority which specified zero tolerance towards the fungus.

The agriculture and supply ministers argued for trace levels of 0.05 per cent, a common norm in international standards and the tolerance specified in Egypt's own wheat 2010 specifications.

Moussa's rigid position disrupted wheat purchase tenders and raised the possibility of a shortage of the strategic grain that the country's impoverished population relies on for nutrition through a massive subsidised bread programme.

"This (conflict) had to be stopped because it started to become a big issue ... we were heading towards a national security problem," Fayed said.

Moussa's removal was accompanied with an announcement a day later that a FAO expert was assigned to conduct a risk analysis on ergot and give recommendations about safe levels for Egypt.

"I have no personal issue with Saad Moussa, but what I do care about is doing the correct thing for Egypt and the Egyptian people," Fayed said.

"If I have a scientific opinion and I want to change the Egyptian specifications then there are certain procedures that I have to take .... Moussa didn't go down that road," he said.

The pest risk analysis assessment currently being conducted could involve field work or not and could take any amount of time between weeks and months, Fayed said.

There is no indication so far of what the FAO expert will recommend. "She could recommend zero or 0.05 or 0.04 percent," he said.

Fayed will meet with the expert for the first time on Thursday on his return to Cairo.

But global suppliers, who regularly used to offer wheat in Egyptian state tenders, are eager for more clarity from their biggest customer before they return.

Fayed said that until a final opinion is reached on the matter, wheat shipments arriving in Egypt with trace levels of the fungus up to 0.05 percent will be accepted. The new quarantine head has said the opposite.

"We are committed to the Egyptian specifications until then," Fayed said, referring to the 2010 specifications allowing up to an 0.05 trace level of ergot.

The new head of quarantine Ibrahim Imbabi, told Reuters on March 8 he would follow a zero tolerance policy stipulated in the 2001 legislation governing his authority until something new was issued.

Fayed said he was unconcerned about Egyptian wheat reserves being affected in the meantime as there were successful purchase tenders carried out by the state grain importer GASC recently.

"There are tenders and purchases," he said.-Reuters

Tags: Egypt | UN | wheat | ergot fungus |

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