Exclusive: Egypt to issue guidelines to tackle wheat import problems

DUBAI (Reuters) - Egypt will issue a streamlined guide on wheat imports within two weeks that will detail all specifications, procedures, and regulations for traders selling to the world’s largest buyer, Supply Minister Ali Moselhy told Reuters on Wednesday.

The baked bread is shown at a bakery in Cairo, Egypt, October 3, 2017. REUTERS/Mohamed Abd El Ghany

Egypt is looking to calm nervous suppliers who have been adding high risk premiums because of what they say are inconsistent import rules and erratic inspection procedures.

Two cargoes were halted in recent months for containing poppy seeds and dozens have been delayed for costly additional procedures.

Speaking at an event in Dubai, Moselhy said a committee that includes the agriculture ministry has been putting together the compiled guide, which will not include new regulations but will combine all relevant rules and specifications, publishing them in one place to avoid uncertainties.

“It is our duty to publish this, and send it to all suppliers ...when you know what should be done, you will be immune to any abuse of power,” Moselhy said.

Wheat shipments to Egypt have been disrupted in recent months after inspectors were stripped of travel benefits related to inspecting cargoes abroad, part of a new inspection system introduced this year intended to streamline trade after a nearly year long-row over import rules.

But traders have said the new system has led to inconsistent rules being applied by government inspectors at Egyptian ports, who are driving up the cost of doing business to protest the loss of travel benefits.

“We cannot bury our head in the sand. What happened is an abuse of power at an inconvenient time...This led to a misunderstanding between suppliers and the government,” Moselhy said of recent trade disruptions.

Suppliers have said the high risks associated with selling to Egypt has led to premiums of up to $500,000 per cargo. With Egypt’s state grain buyer expecting to import around 7 million tonnes of wheat in the fiscal year that began in July, these premiums could add millions of dollars to the government’s food subsidy bill.

Moselhy said Egypt’s state buyer aims to keep wheat imports stable at around 7 million tonnes in the 2018-2019 fiscal year and that current reserves suggest there is no need for additional stockpiling.

Reporting by Maha El Dahan in Dubai; writing by Eric Knecht; editing by Jason Neely