February 11, 2016


Egypt faces potential legal action from Bunge for rejecting wheat shipment



Egypt's General Authority for Supply Commodities (GASC) is now facing possible legal actions from Bunge Ltd for denying a cargo of French wheat from the company, bound for the Egyptian market.


As a result of confusion among government agencies regarding the ergot fungus in import shipments, Egypt had to terminate two tenders for wheat.


Last December, Egypt rejected the Bunge shipments, on grounds that the products on-board failed to meet import rules, Reuters reported.


However, Bunge argued that the quality of the cargo fulfilled terms of a tender that permitted up to 0.05% of ergot at loading.


In addition, quality certificates were signed by a surveyor appointed by GASC itself. These documents are further supported by a phytosanitary certificate issued by French authorities and certificates provided by an Egyptian delegation, declaring that the cargo complies with Egyptian requirements and regulations, Bunge said. 


Even then, difficulties in obtaining approval persist; Mamdouh Abdel Fattah, vice chairman of GASC, said that wheat shipments have to be approved by health and agricultural authorities, based on an import agreement.


"There is no comment because the terms of agreement are clear," Fattah said when asked about Bunge's legal action.


The company's response could complicate future biddings in tenders. "It doesn't really change the overall situation but it won't help and people will still add a risk premium in the tenders," one trader said.


Nevertheless, during a press conference on February 7, Egypt's ministries of supply and agriculture assured traders that they would allow all shipments containing less than 0.05% of ergot.


- Reuters

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