Argentina Said to Get Approval for Egypt-Bound Wheat Cargoes

  • Egyptian delegation inspected grain supplied by Louis Dreyfus
  • French shipment rejected earlier by Egypt over contamination

Egypt, the world’s biggest buyer of wheat, approved the first shipments of the grain from Argentina in more than three years, according to two people with knowledge of the matter.

Two 60,000-metric-ton cargoes were inspected at the Argentine port of Bahia Blanca by a delegation from Egypt, said the people, who asked not to be identified because they’re not authorized to discuss the information. The grain was supplied by trading company Louis Dreyfus Commodities BV.

Position of the Captain Diamantis as of Jan. 27, according to data compiled by Bloomberg.
Position of the Captain Diamantis as of Jan. 27, according to data compiled by Bloomberg.

The approval of the two cargoes comes the same week Egypt rejected a French wheat cargo shipped by trader Bunge Ltd. because of contamination with ergot, a fungus that can cause health problems. That raised concerns about how traders will supply the North African country. The delegation examining the wheat that’s ready for loading in Argentina included Egyptian employees from inspection company Intertek Group Plc, who found no ergot, according to one of the people. The Intertek workers will remain in Argentina until the grain is shipped, the person said.

Egyptian officials routinely travel to exporting countries to inspect shipments before the cargo departs. The General Authority for Supply Commodities, or GASC, the Egyptian agency responsible for purchasing food imports, said last month it bought the 120,000 tons of Argentine wheat following a tender at an average price of $190.94 a ton including freight.

Trader Confusion

A Louis Dreyfus spokeswoman wasn’t immediately able to comment on the shipments. Officials at the GASC didn’t immediately respond to requests for comment. An official at Intertek in Argentina declined to comment on the inspection.

The rejection of a shipment because of ergot has caused confusion among traders because GASC has previously permitted imported wheat with an ergot content of up 0.05 percent. It’s impossible to guarantee a wheat shipment is completely ergot-free, according to Michel Portier, the chief executive officer of French research firm Agritel.

"We can’t say Argentina is ergot-free, but for sure we can say we haven’t seen ergot in our wheat crops for many, many years," Lisardo Gonzalez, wheat-seed director at seed supplier Buck Semillas SA, said in an interview.

The Argentine wheat will be carried aboard the Captain Diamantis and the Giuseppe Mauro Rizzo, the people said. The latter vessel is already at anchor at Bahia Blanca while the former is due to arrive Jan. 29, according to shipping data compiled by Bloomberg.

Argentine grain and soybean exports are surging after President Mauricio Macri scrapped trade restrictions following his election in November.

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