| June 10
June 10 U.S. Agriculture Department officials in
Cairo stepped in to resolve a major contract dispute between
U.S.-based grain exporter CHS Inc and the General Administration
for Supply Commodities (GASC), Egypt's government wheat buyer,
according to a USDA attache report.
The dispute arose after a 60,000-tonne cargo of Canadian
soft red winter wheat sold by CHS was rejected by Egyptian
quarantine authorities in April for containing a
higher-than-allowed amount of ambrosia seeds.
CHS offered to replace the shipment with a 58,000-tonne
cargo of U.S.-grown SRW wheat, but the GASC insisted on a $30
per tonne discount from the original sales price to reflect a
drop in global wheat prices and a 100 percent performance bond,
which CHS was unwilling to risk.
The incident highlighted some of the growing difficulties at
the GASC following the departure in February of vice chairman
Nomani Nomani and nearly all of the group's senior leadership.
Traders have complained that the GASC's new leadership is
inexperienced, inflexible and ill equipped to handle the
country's roughly 10-million-tonne annual wheat import program.
The GASC has not made a purchase on the international wheat
market since February. Two years of political turmoil and
economic crisis have eroded Egypt's hard currency reserves,
making it difficult for the country to finance essential food
and fuel imports.
The GASC threatened legal action against CHS before staff at
the USDA's Foreign Agriculture Service office in Cairo, their
Egyptian counterparts and U.S. State Department officials
intervened. The two parties ultimately struck a discounted deal
for U.S. SRW wheat valued as over $17 million.
A CHS spokesperson contacted by Reuters declined to comment.