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Deja vu for French Exporters as Egypt Queries Wheat Shipment

Posted by Eric Haun

Egypt's decision to consider rejecting a French wheat cargo due to the presence of poppy seeds has caused dismay in France, where traders fear confusion over different types of the seed will spark a costly dispute in a vital export market.
Egypt's agricultural ministry said on Sunday its quarantine authority was examining seeds in 59,000 tonnes of French wheat purchased by state grain buyer GASC, casting doubt on the sole sale of French wheat so far this season to Egypt.
It is a case deja vu for French exporters two years after Egypt refused a shipment of French wheat for containing traces of ergot fungus. That triggered a row over inspection terms that traders see as resurfacing under the guise of poppy seeds.
With costs for keeping the cargo at port estimated at between $10,000 and $15,000 per day, the risks are huge for the supplier of the wheat, while for France there is the threat of being further marginalised in the world's biggest wheat importing country after losing ground to Russia in recent years.
The supplier, Transgrain France, insists any poppy seeds in the wheat would be a non-toxic variety, called papaver rhoeas, that often flowers in French fields, and unlike the papaver somniferum type that contains opium.
Illustrating the high stakes, diplomats at the French embassy in Cairo have written to the Egyptian quarantine authority in support of the supplier, a letter seen by Reuters showed.
Such non-toxic poppy seeds are on a list of impurities permitted in GASC's tender terms provided they do not together exceed 5 percent of the wheat cargo.
Transgrain also argues that testing the cargo on arrival is contrary to the terms of the sale.
"The vessel in question left the port of La Pallice (in France) without any queries regarding its quality, and we do not understand how ... test results at the port of arrival can then be produced," Jean-Philippe Everling, head of Transgrain France, told Reuters.
France is not the only supplier country to be affected by the poppy seed testing. A vessel of Romanian wheat is also held up at port in Egypt.
"Simply no one in these conditions is going to take the risk of selling from France or Romania," a French trader said.
Tensions over import terms can be costly for Egypt, too, if participation in GASC's tenders dwindles.
Ukraine's acting agriculture minister said on Friday that the country could lose market share in Egypt after a separate move by GASC this year to raise protein requirements for wheat.
However, abundant supplies of wheat from a record Russian harvest may limit the impact on GASC.
"The size of the Russian crop is such that the Egyptians will be able to find sellers of Russian wheat throughout the season," another trader said.
(Reporting by Valerie Parent; writing by Sybille de La Hamaide and Gus Trompiz; editing by Susan Thomas)

Sep 11, 2017


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