Egypt Rewrites The Wheat Rule Book - Again
After revelations earlier in the year that anything vaguely resembling wheat was good enough to clear Eygptian customs, things appear to have moved full circle.
Once-upon-a-time 54,000 MT of horse manure casually sprinkled with 1,000 MT of some moldy old feed wheat left over from three years ago would fly through as high grade milling wheat. Egypt now has some of the toughest contractual criteria in the world.
It's currently a buyers market, and Egypt as the largest wheat buyer in the world can afford to be picky.
New rules introduced last month dropped the maximum amount of bug damage from 2% to 1%.
Now the state-owned wheat buyer GASC is moving the goalposts again, insisting that the minimum tender quantity is 60,000 MT (they've previously been perfectly happy buying 30,000 MT cargoes), and also stipulating that vessels can only load from one single port.
The largest exporter of wheat to Egypt is Russia, with France the second biggest. Ukraine have long since been kicked into touch as consistently failing to deliver on quality. Australian and US wheat get a look in periodically, although freight isn't as cheap as it was from those destinations. Germany too feature from time to time.
GASC appear to believe that the recent changes will provide a cost saving, and make it easier to police the quality of imports.
The French aren't too keen, their major grain export facility of Rouen can't physically handle 60,000 tonners. Indeed only two ports can, according to Reuters - La Pallice and Dunkirk - and both of those involve increased shipping costs.
Even Russian exporters are saying that they'd frequently prefer to export in smaller lots, and that the new rules could push the rates for 60,000 MT vessels disproportionately high.
For now at least GASC aren't listening, but they may be forced to reconsider once faced with a situation where 30,000 MT tenders are significantly cheaper than 60,000 MT tenders. After all, cash talks - and cash was how this whole thing got started in the first place.
Once-upon-a-time 54,000 MT of horse manure casually sprinkled with 1,000 MT of some moldy old feed wheat left over from three years ago would fly through as high grade milling wheat. Egypt now has some of the toughest contractual criteria in the world.
It's currently a buyers market, and Egypt as the largest wheat buyer in the world can afford to be picky.
New rules introduced last month dropped the maximum amount of bug damage from 2% to 1%.
Now the state-owned wheat buyer GASC is moving the goalposts again, insisting that the minimum tender quantity is 60,000 MT (they've previously been perfectly happy buying 30,000 MT cargoes), and also stipulating that vessels can only load from one single port.
The largest exporter of wheat to Egypt is Russia, with France the second biggest. Ukraine have long since been kicked into touch as consistently failing to deliver on quality. Australian and US wheat get a look in periodically, although freight isn't as cheap as it was from those destinations. Germany too feature from time to time.
GASC appear to believe that the recent changes will provide a cost saving, and make it easier to police the quality of imports.
The French aren't too keen, their major grain export facility of Rouen can't physically handle 60,000 tonners. Indeed only two ports can, according to Reuters - La Pallice and Dunkirk - and both of those involve increased shipping costs.
Even Russian exporters are saying that they'd frequently prefer to export in smaller lots, and that the new rules could push the rates for 60,000 MT vessels disproportionately high.
For now at least GASC aren't listening, but they may be forced to reconsider once faced with a situation where 30,000 MT tenders are significantly cheaper than 60,000 MT tenders. After all, cash talks - and cash was how this whole thing got started in the first place.
