Surprise, surprise: No takers for third Egyptian wheat tender in a row. For the third straight time since the state re-imposed its ergot ban, GASC, the state’s wheat buyer, received no offers from international suppliers in response to its tender for wheat cargoes. GASC cancelled the tender, as traders had already told Reuters that the zero bids received all but assured GASC “will be forced to cancel its third consecutive tender.” In “normal” circumstances, Bloomberg says, Egypt’s tenders usually receive more than 10 offers.

…Wheat market participants see “Egypt’s import demand to have been ‘deferred’ for a few months rather than to have disappeared,” but the wheat trade globally has been “hit hard” by Egypt’s quarantine crackdown, Emiko Terazono and Heba Saleh write for The Financial Times (paywall). “The virtual absence of the world’s largest buyer comes as wheat markets are groaning under excess supplies… Theories surrounding the reason behind the latest decision have ranged from the need to annul contracts due to falling foreign reserves to infighting between government ministries.” Some traders are now watching to see whether newly-appointed Supply Minister Mohamed Ali Elsheikh “will take a more pragmatic view of the ergot policy and accept the international ergot threshold.” UN FAO senior grain economist Abdolreza Abbassian, is, nevertheless, not cutting his wheat import estimates for Egypt in FY2016-17, saying “I’m willing to bet that Egypt would get its wheat.”

But at what cost? The zero tolerance policy on ergot will cost Egypt around EGP 9 bn and make it liable to international arbitration, Agricultural Export Council Chairman Abdel Hamid El Demerdash told Ahram Gate. The Agriculture Minister should have first guaranteed the 10.5 mn tonnes of wheat required for domestic demand before restricting Egypt’s supply of wheat, he adds.

Alternate theory: Some traders say they believe that GASC’s failed tenders are an intentional strategy on the part of the world’s largest wheat buyer “to convince [other agencies of] the government to overturn the zero-tolerance policy as grain reserves come under pressure,” Reuters reports.