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Thursday, 1 September 2016

GASC tests the market after zero-ergot policy, cancels tender after receiving only one offer

We’re going to beat the drum here and say, “You need to be worried about wheat imports, no matter what industry you’re in.” GASC, the state’s grain buyer and the world’s single largest purchaser of wheat, was forced yesterday to cancel its latest wheat tender after receiving only one offer, Reuters and Bloomberg report. The development came after Egypt officially instated its zero tolerance policy on ergot fungus in imported wheat. The sole offer trading house Venus for 55k tonnes of Ukrainian wheat, while Reuters noted that “other sellers boycotted the tender as they oppose Egypt’s policy.” Bloomberg said, “Tunisia, which buys seven times less wheat than Egypt, managed to attract offers from 13 firms in a separate tender Wednesday before buying 50,000 metric ton.”

Said a senior director at Société Générale in New York, according to Bloomberg: "Egypt has already lived through the riots that occurred when wheat prices went up, it took down Mubarak then. What will they do when they have no wheat? No one wants to play their games, and sooner or later, they have to bend a bit.” The business information service also nails it on the head when it notes that the whole wheat import flap smells very much of a turf war between the ministries and agriculture and supply.

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