Egypt's health ministry banned wheat with any ergot fungus on Monday, a decision traders said signals the zero tolerance policy that wreaked havoc on the country's grain purchases earlier this year is back to stay.
The decree, seen by Reuters, brings the ministry in line with an agriculture ministry decree issued last week reinstating the ergot ban, a policy that previously hampered the world's largest wheat buyer's ability to import grain.
The health ministry's decision is the latest in a back and forth battle over the highly contentious wheat import regulation that has halted state grain tenders, raised prices, and been the subject of debate between and within ministries that have often advocated policies at odds with one another.
Ergot, a common grains fungus that can cause hallucinations in large amounts, is considered harmless in low quantities and more common international standards allow a 0.05 percent tolerance level.
Traders, who say it is nearly impossible to guarantee zero ergot, said Monday's decree was significant as it brings all three ministries that oversee the policy - supply, health and agriculture - in line for the first time and leaves little room for the state grain buyer to relax the rules if need be.
"It's almost impossible now to change the decree, it's like they want to force the zero ergot and think that everyone should abide by it," one Cairo-based trader said.
When Egypt's agriculture quarantine authority began rejecting shipments containing trace levels of ergot last year, it was the lone advocate of a stringent zero tolerance policy, on the margins of a debate over quality control.
At the time, the quarantine authority's own ministry, the agriculture ministry, publicly claimed to follow the tolerance level of up to 0.05 percent.
In recent weeks, however, and following an agriculture ministry-led study that concluded ergot could pose a threat to plant life, the quarantine's strict position has been formally adopted by every major institution overseeing the ergot rules.
The impact on imports is already being seen. Last week, at the first tender state grain buyer GASC (General Authority for Supply Commodities) has held with zero ergot stipulated in its tender booklet, only one supplier made an offer.
GASC was forced to cancel the tender, underscoring the difficulty the country may face sustaining a massive bread subsidy programme while also demanding standards suppliers say are unattainable.
Traders said the health ministry decree will now make it harder for GASC, a long time proponent of the more tolerant 0.05 standard, to ease the rules should it continue to face low turnout at tenders.
"GASC used to base their 0.05 percent policy on the basis of the health ministry's position, so now that they've changed that it means the decision is likely final," another Cairo trader said.
Egypt's agricultural quarantine authority has argued that even trace amounts of ergot can contaminate plant life and give the fungus a foothold to flourish where it does not exist now.
The unified stance on ergot also comes amid what traders have said are heightened inspection measures at ports of origin in recent weeks, implemented to guarantee zero ergot.
Traders say the measures, which include re-inspecting and replacing wheat suspected of containing even single grains infected with ergot, have held up shipments at ports and added to the cost of doing business with Egypt.
"Everything is a mess in Egypt and in the ports of Constanta and Novorossiysk," said one trader, referring to wheat shipments that have been held up in Romania and Russia.
For a timeline detailing Egypt's on again off again relationship with ergot click here.