Egyptian quarantine authorities last week rejected another cargo of wheat for containing traces of ergot, it emerged this week.
According to Arthur Marshall, Analyst with the AHDB this came despite a press conference last week by the ministries of supply and agriculture reassuring suppliers that cargoes containing up to 0.05% would be permitted (in line with international standards).
Ergot infection causes a reduction in the yield and quality of grain and hay, and if livestock eat infected grain or hay it may cause a disease called ergotism.
Marshall says this latest rejection of Canadian wheat, purchased by private importers rather than the state importer GASC, comes after 63,000t of French wheat was rejected for ergot earlier this month.
He says suppliers have since been wary of selling to Egypt and offers have typically included an added risk premium, which in turn has slowed down Egypt’s buying pace. FC Stone report that only 415Kt has been purchased to cover Jan-Mar 2016 compared to 1.6Mt last year, he says.
According to Marshall this continues to make markets nervous, adding uncertainty as to where wheat export demand can be found – especially since Egypt is the world’s largest wheat importer.
Nonetheless, he says Egypt will likely need to source further wheat to make up for the slow pace at some point, so the market may find that relatively high prices offered may start to be accepted later in the season.