(Corrects to Russia top supplier of wheat to Egypt in paragraph
7, not buyer)
* Reversal restores international 0.05 pct ergot standard
* Egypt cancelled 3 consecutive wheat tenders after ban
* Traders sceptical of latest change, may hold back offers
By Eric Knecht
CAIRO, Sept 21 Egypt has reversed its
controversial zero-tolerance policy on the common grains fungus
ergot, the government said on Wednesday, backtracking on an
import regulation that had all but blocked its access to global
Egypt, the world's largest buyer of wheat, has seen its
imports grind to a halt since it imposed a ban on ergot last
month, with three successive state tenders cancelled on the back
of mass boycotts by suppliers who say the condition is
impossible to guarantee.
Ergot can cause hallucinations when consumed in large
amounts but is considered harmless in low quantities.
The government said it was reinstating a 0.05 percent
tolerance level for ergot, a common international standard it
had used before the ban, and was applying it to both outstanding
and future wheat contracts.
The decision to apply last month's ban retroactively to
outstanding contracts had led to the suspension of 540,000
tonnes of wheat en route to Egypt after being suspected of ergot
contamination, the government said.
A flurry of cargoes held up and rejected at ports after last
month's ban infuriated traders, who argued their contracts, made
under the old 0.05 percent rule, should be honoured.
Russia, a top supplier of wheat to Egypt, banned Egyptian
fruit and vegetable imports shortly after one of its cargoes was
rejected before setting sail from Novorossiysk. An Egyptian
delegation is expected to arrive in Russia next week to discuss
Egypt runs a massive food subsidy programme that provides
bread for tens of millions of its poorest citizens and which may
have come under threat had it not eased its import restriction.
After announcing the policy reversal the government said it
had enough wheat to sustain the country for four months. It said
it would compensate for the recent slowdown in wheat inflows by
"operating all ports."
"Egypt had no real choice but to cancel the zero ergot
policy if they want to feed their people with large scale wheat
imports. It has been said so many times during this affair that
no country anywhere in the world can provide wheat with zero
ergot in bulk volumes," one European trader said.
Still, some traders expressed scepticism at what they saw as
just the latest flip-flop in a months'-long saga that has seen
decrees overturned and contradictory policy announcements from
"There needs to be new legislation. This is not enough for
any supplier to participate," one Cairo-based trader said.
Wednesday's reversal restores 2010 standards that permit
0.05 percent ergot tolerance but makes no mention of agriculture
quarantine legislation that still allows for zero tolerance, the
trader added - a contradiction that in the past allowed
rejections to continue.
As part of the rule reversal, the government said it will
contract an international firm to conduct ergot inspections on
wheat shipments and discontinue the practice of sending foreign
delegations led by officials from three of its ministries.
For a timeline on Egypt's on again, off again relationship
with ergot click
(Additional reporting by Ahmed Aboulenein in Cairo, Maha El
Dahan in Abu Dhabi, and Michael Hogan in Hamburg; Editing by
Susan Fenton, Greg Mahlich)