Egypt court ruling revives row over ergot fungus in wheat imports

Telecom operators receive 4G wireless frequencies

CAIRO, June 24, (RTRS): A court that ordered the suspension of Egypt’s food inspection system based its ruling in part on the quarantine service’s right to ban grain imports with any trace of the ergot fungus, raising the possibility the controversial rule could be restored.

The government’s new food inspection system simplified trade after a nearly year-long row over the quarantine service’s zero-tolerance approach to ergot. Traders had said they could not guarantee zero trace and boycotted tenders, effectively shutting off the world’s biggest wheat importer from the grain trade.

The new inspection regime, launched this year, applied a more common global standard, allowing 0.05 percent of ergot in shipments and helping regular state grain tenders to proceed.

But an Egyptian court this month ordered that the new system be suspended, although the government said it would appeal that decision and keep its inspection system in place as it did so.

The court’s written verdict, seen by Reuters on Thursday, said the new system “resulted in a breach of the (import) requirements stipulated by the Agriculture Ministry’s quarantine service, which banned the entry of wheat shipments containing pests that are prohibited from entering the country, including the fungus ergot.”

This opens the possibility that the quarantine service could restore its zero-tolerance rule. However, for now, the government has not empowered the quarantine service to do so.

Inspection

After last year’s trade row, Egypt moved the inspection process away from the quarantine service to the Trade Ministry’s General Organization for Export and Import Control (GOEIC).

The Agriculture Ministry said last week it would not return inspection authority to its quarantine service.

A group of quarantine inspectors had challenged the new system in court, arguing it illegally handed inspections to a body ill-equipped to oversee the process, allowing imports to enter with hazardous contaminants harmful to animals and plants.

Lawyers who raised the case said the government was obliged to suspend its new inspection system during an appeal, a process that could take months.

On Thursday, Egypt’s state grain buyer GASC holds its latest international purchase tender for wheat. Results are expected the same day.

GASC has managed to continue purchasing grains despite the court ruling in part because the government has insisted it would not revert to a ban on ergot. That position is now complicated by the court’s ruling.

Meanwhile, the lowest offer at a purchase tender held by Egypt’s state grain buyer GASC on Thursday was at $190.88 per tonne free-on-board (FOB) for 55,000 tonnes of Ukrainian wheat, traders said.

The lowest offer after accounting for shipping costs was presented by Cerealcom for 60,000 tonnes of Russian wheat at $207.09 per tonne.

Results are expected to be announced later on Thursday.

GASC is seeking an unspecified amount of wheat from global suppliers for shipment for July 25-Aug 5.

The tender came the same day a court verdict to suspend the country’s food inspection system revealed the ruling, made verbally this month, was partly based on allowing for a ban on the grain fungus ergot — reviving the possibility that the controversial zero tolerance policy could return.

CAIRO:

Also:

Egypt’s telecoms operators received the wireless frequencies needed to deliver 4G mobile broadband networks on Wednesday, a key step in the long-delayed introduction of high-speed telecoms services.

Egypt sold four 4G licences in 2016 as part of a long-awaited plan to reform the telecoms sector and raise dollars for stretched government finances.

“The authority has sent a letter assigning the frequencies to telecommunications companies today,” an official at the National Telecom Regulatory Authority told Reuters.

The country’s three mobile operators — Vodafone Egypt, Orange, and Etisalat — acquired licences.

Orange Egypt agreed to a provision that half the licence fee be paid in dollars.

“The companies will redistribute the frequencies in preparation for offering the service commercially in the market within two months,” said the official on condition of anonymity.

Egypt’s state-owned landline monopoly Telecom Egypt said in July 2016 it would offer 4G services within a year of obtaining frequencies.

CAIRO:

Egypt announced the close of its local wheat harvest on Tuesday, having bought 3.4 million tonnes of wheat from farmers, Supply Minister Ali Moselhy said, just short of the government’s target of 3.5-4 million.

Egypt, the world’s largest importer of wheat, reformed its local procurement process this year to end widespread fraud and smuggling of the grain from abroad that had inflated its collection figures in years past, costing the country millions of dollars.

Grain industry experts and lawmakers who led an investigation into the fraud last year have said upward of 2 million tonnes of Egypt’s reported 5 million may have existed only on paper.

Egypt this year scrapped the subsidy it traditionally pays farmers and instead pegged the local buying price to world market prices for the grain, a measure that traders have said removed the incentive for smuggling but left the country with a lower procurement figure.

The government paid farmers 13 billion Egyptian pounds ($716.5 million) in total for their wheat, Moselhy said in a statement.

Egypt also purchased 350,000 tonnes of durum wheat from farmers which it will sell to local pasta factories, a supply ministry spokesman said.

That is separate from the 3.4 million tonnes, which, along with its state purchase tenders for imports, supplies a massive subsidised bread programme relied on by tens of millions of Egyptians.

Egypt’s wheat harvest typically runs from April through July, but Moselhy said the government will reopen a small number of collection points in six provinces during the first two weeks of July to buy any quantities of wheat that remain.