Romanian grain trading house Cerealcom Dolj said on Thursday it had declined to ship wheat to Egypt because of new rules about ergot fungus content, refuting reports that Egyptian inspectors had rejected a 63,000 tonne cargo.
Traders said on Wednesday that Egyptian inspectors had rejected the wheat shipment in a Romanian port after checking for ergot, the first time difficulties with a cargo at a loading port had been reported since Egypt introduced a zero content level on ergot late last month.
"Cerealcom Dolj's wheat was not rejected, it was Cerealcom Dolj that declined to deliver the goods under other terms than the ones initially agreed within the contract," the company told Reuters.
Egypt's wheat imports have been disrupted this year by disagreements between government departments about purchases of grain containing ergot, with a series of shipments rejected at Egyptian ports.
Ergot, a common grains fungus that can cause hallucinations when consumed in large amounts, is considered harmless in low quantities. Egypt's state wheat purchasing agency GASC had previously permitted wheat imports with the common international standard of 0.05 percent ergot tolerance level, but re-introduced a policy of zero ergot content in late August.
Cerealcom Dolj said that in a GASC purchase tender on July 16 it was awarded a contract for 63,000 tonnes of Romanian origin wheat and the conditions included a maximum permitted level of 0.05 percent for ergot with delivery for Aug. 20-30 for loading in the Romanian port of Constanta.
"The loading procedures started on Aug. 27," Cerealcom Dolj said in an emailed statement to Reuters. "On Aug. 28, the Egyptian quarantine authority decided that the imported milling wheat must respect the condition of zero ergot content."
"The Egyptian state delegation, present in Constanta, the loading port for the receipt of the goods, requested Cerealcom Dolj to deliver goods that comply with the newly modified quality parameter, modified unilaterally by the Egyptian authority."
"Cerealcom Dolj declined the new condition that GASC intended to force on this delivery and decided to unload the quantity loaded up to that moment on board, from the vessel."
The trading house said it always honours its contractual agreements. "But Cerealcom Dolj does not consider it normal and does not accept that the rules should change unilaterally in the middle of the 'game', after an agreement has been concluded," it said.
Observers have said it is not feasible for any country of origin to supply wheat in bulk volumes with a zero ergot content.
(Reporting by Michael Hogan)