Back to the complete issue
Wednesday, 15 November 2017

Zero-tolerance policy for ergot could be making a comeback

Just when you thought the ergot issue was resolved, it comes back like Glenn Close in Fatal Attraction: An Administrative Court ruled on Tuesday a decree from the prime minister’s office last year that effectively allowed wheat shipments of 0.05% ergot to enter Egypt was invalid, Reuters reports. The ruling raises the specter that the zero-tolerance policy which shook up international wheat markets and raised prices of wheat imports for Egypt may see a comeback after we thought the issue had been given an appropriate burial. The court said in its ruling on Tuesday that the prime minister was not legally authorised to issue last year’s decree because his office was not the competent authority governing import rules for agricultural products, said Tarek Al Awadi, a lawyer who raised the case.

The government responds: Egypt’s budget cannot sustain purchases of wheat shipments that are ergot-free, said Nagla Balabel, head of the Agriculture Ministry’s quarantine body. She tells Al Mal that the ministry will now look for ways to fight back against the decision, including appealing it. Meanwhile, the Agriculture and Supply ministries have agreed to form a joint committee to set clear guidelines on importing wheat, Deputy Agriculture Minister Safwat El Haddad said, according to Al Shorouk. This committee will have the deciding vote on what happens to shipments which contain ergot, he added. The Supply Ministry had already issued a streamlined guide for wheat imports, which have won praise from traders, after the whole poppy seed fiasco.

Al Awadi claims that the court’s ruling must be enforced even as the government looks to appeal the decision with a higher administrative court and that all shipments with ergot must be suspended. An Egyptian court earlier this year ordered the suspension of an inspection system launched to streamline trade in response to the ergot row, but the government did not implement the ruling. We’ve been noting claims by traders that recent disruptions in shipments and wheat markets due to traces of harmless poppy seeds was the result of Egyptian wheat inspectors fighting to maintain their travel perks. Hell hath no fury like a bureaucrat scorned.

But don’t worry, we have enough wheat on hand: Supply Minister Ali El Moselhy told the House of Representatives that strategic wheat reserves (both in storage and contracted) are currently enough to last until 5 April 2018.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.