| CAIRO/DUBAI, March 22
CAIRO/DUBAI, March 22 Egypt, the world's largest
buyer of wheat, has issued preliminary rejections on seven
cargoes of the grain since introducing new import rules in
January, prompting many traders to raise prices at state
tenders, five traders told Reuters.
Egypt's import rules caused a nearly year-long standoff last
year after it rejected a number of shipments for containing the
common grains fungus ergot. But it adopted rules in line with
international norms after mass boycotts of its state tenders.
It introduced a new streamlined inspection system, reversed
a zero-tolerance policy on ergot and no longer sends government
inspectors abroad to approve cargoes.
But the five traders told Reuters that under the new system
the number of rejected cargoes had risen, driving up the cost of
The seven cargoes purchased by GASC had received initial
rejections from entering Egypt's ports due to higher than
acceptable levels of insects or grass seeds, traders said.
This was in addition to two Russian wheat cargoes and one
Argentine cargo that were rejected at their ports of origin
this month for not meeting GASC standards.
GASC was not immediately available for comment.
Six of the seven cargoes rejected on arrival were forced to
undergo costly fumigation and sieving before being inspected for
re-entry, the traders said. One vessel was accepted on
These initial entry rejections were rare under the old
system, traders said, suggesting the new inspection regime has
brought with it tougher enforcement of existing rules.
The extra measures cost $2.5 per tonne of wheat, or about
$150,000 per typical 60,000 tonne cargo purchased by GASC, a
cost borne by trading companies, the traders said. They say they
are now increasing their offer prices by the same amount at
state tenders to offset the loss.
"Traders of course are putting a premium now on the prices
they offer GASC at above $2 a tonne as a result of the
situation," one Cairo-based trader said.
GASC this season is set to import at least 5.6 million
tonnes of wheat, suggesting such an increase could cost Egypt
over $11 million per year.
The price at which GASC pays for its purchase tenders can
influence global grain prices.
(Editing by Veronica Brown and Susan Thomas)