4 Min Read
(Adds latest tender purchases)
By Arwa Gaballa
CAIRO, June 13 (Reuters) - An Egyptian court on Tuesday suspended a food inspection system launched to reform the trade in agricultural commodities, lawyers on the case told Reuters, sowing uncertainty again over imports of wheat in the world's largest buyer of the grain.
The inspection system was Egypt's answer to a near year-long row over stringent import requirements, including a ban on the common grain fungus ergot, a policy that halted Egypt's wheat trade last year when trading houses boycotted its state tenders.
The suspension, which the government has 15 days to appeal, means the quarantine body that applied the ban will again handle the inspection process both in Egypt and abroad, though it does not necessarily imply a return to zero ergot, the lawyers said.
"I have no idea what will happen with ergot, that's for the agriculture ministry to decide," said Alaa Zaki, one of the lawyers on the case.
The new system had stripped the agriculture quarantine body of its inspection powers, and moved the process to the trade ministry's General Organization for Export and Import Control (GOEIC).
The case was brought by a group of quarantine inspection employees in their capacity as citizens, not by the body itself, as well as several other parties, including some connected to the health ministry, which also takes part in inspections.
They said the new system illegally stripped the quarantine body of its powers and handed it to a trade ministry body ill-equipped to oversee inspections, allowing imports to enter with hazardous contaminants harmful to plant and animal health.
Egypt's ban on ergot was reversed last year by a decree that came two months before the new inspection system. That decree is also being challenged in court in a related case, though a ruling could take several months, the lawyers said.
Egypt's state grain buyer GASC has been buying wheat on international markets in recent weeks despite its ongoing local harvest, a time when it typically stops tendering. At a tender on Tuesday GASC bought 300,000 tonnes of wheat from Russia, Romania and Ukraine, taking its purchases to over one million tonnes in under a month.
Traders have said the buying spree could signal an intention to stockpile wheat ahead of any fallout from the ruling.
Egypt said on Monday it had collected 3.4 million tonnes of wheat from farmers so far during its harvest, which runs through July. It has said it is targeting between 3.5 and 4 million tonnes.
GASC told Reuters last week that it intends to continue permitting up to 0.05 percent of ergot in its wheat purchases, a common international standard stipulated in its tender booklet.
Egypt baffled traders last year when the agriculture quarantine body began rejecting wheat shipments with trace levels of ergot despite GASC's 0.05 percent permission level as well as reassurances from the ministries of supply and agriculture that they would not apply a zero standard.
Tuesday's ruling will restore delegations of inspectors sent by the government to ports of origin abroad. They had been replaced by private companies under the new system.
"The quarantine people who filed the case are worried that foreign inspectors don't care about Egypt's crop and the safety of the population," said Mohamed Zaki, a quarantine inspector. (Reporting by Arwa Gaballa; Additional reporting by Maha El Dahan; Writing by Eric Knecht; editing by Jason Neely and David Evans)