For the first time in over a month and after annulling a decision that allowed only zero-ergot wheat imports, the General Authority for Supply Commodities (GASC) has now received offers for its wheat purchase tender, buying 240,000 tons of Russian wheat last Thursday. Ergot is a fungus found in grains that is dangerous in large doses. The government said last week that it would accept wheat with 0.05 per cent of ergot in line with international food standards specifications. Egypt had been expected to backtrack on its prior decision to accept only zero-ergot wheat imports after almost no offers were received in response to three prior tenders. Analysts feared that this could affect the country's strategic wheat stocks. Pressure on the government was not only driven by the abstention of traders, and a decision by Russia to ban fruit and vegetable imports from Egypt was seen to be related. Egypt reversed its decision on ergot in wheat after Russia imposed the ban. Some 540,000 tons of Russian wheat imports were reportedly suspended because of the zero-ergot policy. According to the Fresh Food Portal Website, an industry source, Russian Deputy Prime Minister Arkady Dvorkovich denied that the ban was in retaliation against Egypt for the ergot ban. He said the measures would be in place until Egypt introduced “more efficient phytosanitary measures”. However, on Monday Egypt's Trade and Industry Ministry said that Russia had agreed to lift the ban and that Egypt would take every measure necessary to guarantee the quality of its agricultural exports to Russia. An Egyptian delegation arrived in Russia on Sunday to investigate the Russian concerns. According to Mustafa Al-Nagari, secretary of the Agricultural Exports Council, mechanisms exist for dealing with such issues, and it is not the first time Russia had complaints against Egypt. Al-Nagari said the number of concerns raised about Egyptian agricultural exports had been dropping. “Even when the concerns were higher, Russia never imposed a ban,” he said. Russia has a history of using bans on agriculture and food imports to give it leverage in disputes, he added. Egypt exports agricultural products worth some $350 million to Russia, and the market for Egyptian products had grown over the past few years on the back of Russian differences with its other trading partners. In 2014 Russia banned EU imports after the bloc imposed economic sanctions on Russia over its annexation of the Crimea. Last year Russia embargoed Turkish imports following the downing of a Russian jet in Turkish airspace. Such differences have allowed Egypt to export more to Russia, including by exploiting new markets. Egyptian grape exports have risen from 200,000 tons to one million tons, for example. Onion exports have grown from 15,000 to 100,000 tons. Al-Nagari said he did not think improved Russian relations with Turkey would harm Egypt's share of the Russian market as Egypt is the largest customer of Russian wheat, importing around 11 million tons annually. The specifications on ergot in wheat previously demanded by Egypt had threatened Russian wheat exports at a time when there was a good harvest and other markets were shrinking. Other wheat importers such as Syria are not importing the same amounts of wheat they used to and Algeria has broadened its sources. “What the Russians did not take into account was the fact that Egypt's decision on ergot was not meant to be aimed at them, but was taken with regard to all imports,” Al-Nagari said. World cereal production has been positive in 2016 due to suitable weather conditions. The UN Food and Agriculture Organisation (FAO) earlier this month said the outlook for wheat production had improved by 1.2 per cent, putting this year's world production forecast above the 2015 record at 741 million tons. Al-Nagari said the decision to apply the international specifications on ergot was a logical one, but he stressed that precautionary measures should be abided by. Trucks carrying imported wheat should use desert roads away from agricultural land to avoid possible contamination of domestic wheat and they should be lined with protective materials. Once it reached the mills the wheat should be cleaned and sifted thoroughly, Al-Nagari said. He explained that ergot is not difficult to detect because it is dark and rock-like in form and can be sifted out by sorting machines. However, any ergot resulting from the cleaning needed to be disposed of safely to avoid contamination of the local crop, he said. Since the beginning of this year the government had been flip-flopping on ergot fungus in imported wheat, sometimes demanding zero traces of it and at other times changing its mind and accepting international specifications. In the medium term, Al-Nagari suggested that the government take additional preventive measures by agreeing with the exporting countries to implement protective steps at the ports of export, even if this means a higher premium. “But we need to have enough stocks to be able to do that,” he said. Egyptian agricultural products also came into negative focus in recent months when some Egyptian processed strawberries were investigated by the US Food and Drug Administration as a result of claims they that had been contaminated with the Hepatitis A virus. This prompted investigations by other countries such as Jordan, Kuwait, Saudi Arabia, United Arab Emirates and Sudan. Both Kuwait and Saudi Arabia cleared Egyptian products.
