Egypt's zero-ergot policy shook wheat markets last year, when the world's largest wheat importer rejected one shipment after another as a result of claims that they were contaminated by ergot, a common fungus that is harmless as long as it is within certain levels. The government gave in after suppliers said that its criterion of zero ergot was impossible to meet. However, last week the Ministry of Agriculture one again surprised wheat exporters when it announced that a French wheat shipment suspected of including drug-producing poppy seeds was being re-examined by the Agricultural Quarantine Authority. Certain kinds of poppy seeds can be used to produce the drug opium. If the examination confirms the presence of the poppy seeds, the shipment will be rejected. The case will then be transferred to the prosecutor-general, according to the Ministry of Agriculture. The 59,000-ton French shipment of wheat was purchased by the state-owned General Authority for Supplies and Commodities (GASC). The wheat was to be used to produce the subsidised bread provided to ration-card holders in Egypt. This is not the first time that poppy seeds have been found in imported wheat. Last month, an examination found poppy seeds in a 63,000-ton Romanian wheat shipment left in port for more than a month awaiting the examination results. Mohamed Abdel-Fadil, a wheat importer, said the Romanian shipment had entered because the poppy seeds were “dead” and could be easily sieved out from the wheat, while the French wheat was still under examination. “There are lifeless poppy seeds even in locally produced wheat. I expect that the French shipment will be permitted onto the market,” Abdel-Fadil explained. Officials at the authority inspect the wheat by sight and then take a sample to the lab, according to Abdel-Fadil. If the examination proves that any poppy seeds are active, they are considered to be drugs and the cargo may be re-exported. “The ministry's announcement that the shipments might be rejected before the final results of the examination are known is nothing but propaganda,” Abdel-Fadil said. However, the news had a harmful effect on wheat markets. Following the publication of news of Egypt's initial rejection of the French and Romanian shipments, Russia increased its wheat prices. Moreover, the possibility of rejecting French or Romanian wheat shipments containing poppy seeds left traders doubtful about the government's wheat-import policy and its strict specifications. Ali Abdel-Rahman, a professor at the Agricultural Research Centre in Egypt, said that the government applied the same specifications that had been set for years. These include health criteria in line with international requirements as well as quality specifications that differ from one country to another. “If the examination finds the wheat carries diseases, the cargo is rejected and re-exported to the country of origin. If the wheat contains another seed like the poppy seed, this can simply be separated from the wheat before entering the market. The importer is responsible for separating the wheat from other seeds, after which the wheat is re-examined,” Abdel-Rahman said. He also expected that the French shipment would enter the Egyptian market. It would be difficult to buy wheat containing active poppy seeds from a European country, since these countries examine their export products to maintain their reputations in the international markets, he said. Abdel-Rahman warned that if the government decided to reject the wheat shipment this could negatively impact Egyptian exports. “In response to Egypt's rejection of Russian wheat because of its suspected contamination with the ergot fungus last year, Russia refused to import Egyptian oranges. Egypt was then obliged to reopen its doors to Russian wheat because Russia is the largest market for Egyptian oranges,” Abdel-Rahman said. Something similar could apply to France and Romania if the government takes a final decision to reject their wheat shipments. Consequently, these countries could hinder Egyptian exports from entering their countries, which are important markets for Egyptian exports. Abdel-Fadil pointed out that the government pays private inspection companies to examine imported grains before they are shipped from exporting countries. “If the ministry does not trust their examination results and inspects the wheat again in Egyptian ports, it would be better if the government stopped paying them,” he said. Egypt's annual needs of wheat are estimated at 20 million tons, of which 9.5 million tons is used to produce subsidised bread. Locally produced wheat in 2017 was estimated at 3.5 million tons. According to official figures, the GASC imported 5.5 million tons of wheat in 2016/2017, compared to 4.4 million the previous year. Egypt is the world's largest importer of wheat, and GASC's import target for 2017/2018 is 6.3 million tons. The cost allocated for subsidised bread is estimated at LE37 billion in the country's budget for 2017/2018.
