Latest On Russian/Egyptian Wheat Dispute

The dispute between Russia and Egypt over wheat quality "was a misunderstanding, but it was not a misunderstanding on our part. It was a misunderstanding on the Egyptian part," First Deputy Prime Minister Viktor Zubkov is quoted as telling Reuters.

Unconfirmed reports today appear to suggest that the dispute has been resolved over the weekend. Presumably by the arrival of a large quantity of cash for somebody.

The dispute threatened a very important market for Russia, who have supplied around 3.7 MMT of the 5 MMT of wheat that Egypt had imported up to the end of March in the 2008/09 marketing year.

"The reports about seizure or arrest of Russian grain and participation of the Egyptian prosecutor's office in the investigation are provocative and remind of the worst methods used when somebody is absolutely unable to compete honestly," the Russian Grain Union said in a statement, suggesting that the move was a blatant attempt to renegotiate on price.

There were similar quality issues with Ukrainian wheat early in the marketing year, with some talk of it being excluded from future tenders as an approved country of origin. Whilst this was officially denied, no tenders for Ukraine wheat have subsequently proved successful.

Russian wheat has subsequently been winning this season's tenders by a country mile, consistently coming in $10-20/tonne lower than US, Canadian or European wheat.

Now far be it from me to suggest that there might be a bit of skulduggery going on here, but I wonder if there might be a bit of skulduggery going on here?

"We've got some lovely bread-making wheat for you here Mr Egyptian man, top quality stuff for just $200/tonne."

"Erm, how much is that other stuff over there, yeah that brown stuff, with the rat slash and weevils all over it? I'll have 30,000 MT of that with ten tonnes of good stuff sprinkled on the top. Don't worry about the paperwork, just leave it blank, it's all in Egyptian anyway, we'll fill it all in at our end."