Egypt Cancels Wheat Tender as Standoff With Traders Persistsby and
Traders have cut the number of offers or charged higher prices
Egypt rejected cargo from France, citing fungus contamination
Egypt, the world’s largest wheat importer, canceled another tender to buy the grain, signaling that a weeks-long row with traders over shipping requirements hasn’t been resolved.
Egypt’s state buyer, the General Authority for Supply Commodities, said it scrapped its wheat tender Sunday without giving a reason. The deadline had been extended from Saturday. Traders at the deadline offered only four cargoes of wheat at an average price of $195.96 a metric ton, including freight.
The government canceled three tenders in the past two weeks as traders refrained from making offers or charged higher prices after the North African country rejected a cargo of French wheat because of ergot, a naturally occurring fungus. The country last bought 60,000 tons of Romanian wheat in a tender on Friday, the government’s first international purchase since Jan. 21 and the smallest since August. Egypt spends billions on wheat every year to provide subsidized bread for its 88 million people.
“We still waiting to see what will happen with wheat shipments en route to Egypt. Will they face the same fate like the French cargo?” said Hesham Soliman, the president of Alexandria-based Medstar for Trading. “We fear that more shipments will get rejected, so we have to wait and see.”
Egypt is struggling to get traders to participate in sales of wheat after the government issued conflicting statements about how much ergot it would accept. The Agriculture Ministry said last month it would turn away grain containing any ergot, even as the country’s state-run buyer said it would accept levels of 0.05 percent, in line with international standards. The Ministry later reversed the zero-tolerance policy, saying it would accept shipments at the global standard. Still, the low interest in recent tenders has shown traders remain cautious.
Egypt is looking to expand its suppliers for wheat beyond tenders, Supply Minister Khaled Hanafy said last week in Cairo.