Confusion reigns as Egyptian government rejects ergot ruling

Egypt’s grain imports hang in limbo after the government rejected a court ruling which reinstated a controversial ban on grain imports containing the fungus ergot, Bloomberg has reported.

While the government of the world’s largest wheat buyer is looking to ease importers’ fears, with no official announcement, markets were left scratching their heads.

The Egyptian government had previously sought to restore confidence in the situation for grain importers, promising an updated, transparent system of rules. Set to be confirmed earlier this month, no official announcement has been made on their progress.

The decision from the government throws further confusion on an already-complex situation, with several shipments previously subject to costly delays after inspection authorities alleged excessive levels of ergot, ambrosia, and poppy seeds in grain imports.

Despite the complexity of the situation, state procurement agency GASC pressed ahead with a tender last week even though it was said to have sufficient stocks to last it until April 2018.

Contrary to the expectations of some in the market, there was no shortage of offers as sellers opted to offer at lower prices rather charge a risk premium. Nonetheless, prominent multinational trading houses were conspicuous in their absence.

GASC purchased 240,000 mt of Russian-origin wheat for January shipment at an average price of $194.65/mt FOB, down from the 350,000 mt it purchased for December shipment at an average price of $197.93/mt FOB.