June 4, 2009

Egypt quarantines wheat from Ukraine and Australia

Egypt has quarantined 11,000 tonnes of Ukrainian and Australian wheat over quality concerns, but the real problem may be dishonest local importers.


Egyptian authorities are now considering destroying the wheat or sending it back to its point of origin, sources said Wednesday (Jun 3).


A source said the wheat was held in storage near the Mediterranean port of Alexandria and that a committee had checked the wheat and confirmed the grain was spoiled and unfit for human consumption. 


It is currently difficult to tell if this is a policy decision or a routine trade problem, but the issue could still cause a fall in the price for Ukrainian wheat at future Egyptiain tenders, said Mykola Verntsky, director of Ukraine's ProAgro consultancy.


This is an isolated incident because a lot of Ukrainian grain has been delivered and continues to be delivered to Egypt without any quality problems, said director of UkrAgroConsult, Serhiy Feofilov.


UkrAgroConsult said Ukraine has exported 997,605 tonnes of wheat to Egypt in the first 10 months of the 2008-09 year.


Egyptian lawmakers have complained about the quality of some wheat imports, an important food staple in Egypt, and prompted a scrutiny of grain imports.


European traders said they suspected the Egyptian action was focused on a minority of wheat importers rather than general problems with wheat from specific origins.


Some local importers in Egypt have in recent months been seeking very low prices for imports that would not meet Egyptian quality specifications, and the Egyptian authorities seem to be cracking down on such shipments, a trader said.


The trader also said the problems with Ukrainian wheat this season are well-known but there are no issues with Russian and Australian wheat, unless low quality wheat from these countries was deliberately bought at cheaper prices.


Egypt, one of the world's largest wheat importers, quarantined tens of thousands of Russian wheat over quality concerns last month. The Russian authorities stated its confidence in the quality of their wheat, and Egyptian Trade Minister Rachid Mohamed Rachid said they would not stop importing Russian wheat.


The minister on his visit to Russia, also said Cairo and Moscow would take joint measures against companies that import poor quality wheat to Egypt.

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