According to a Nov. 9 Global Agricultural Information Network (GAIN) report from the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA), the directive accelerates the release of inbound foreign wheat shipments; inspection procedures are to be expedited and be subject to the Egyptian standard for wheat. Directive No. 48 does not include any new regulations; rather it is a compilation of all relevant rules and specifications to date.
“The uncertainty with Egypt’s wheat import rules and the application of its inspection procedures in recent months has reportedly led wheat suppliers to charge high-risk premiums,” the USDA noted in the report. “FAS Cairo trade contacts comment that they pay $8 to $10 per tonne in risk premiums.”
Ali Museihli, Egypt’s Minister of Supply and Internal Trade, has indicated in recent press interviews that Egypt would detail all specifications, procedures, and regulations for traders selling to the world’s largest wheat buyer.
The report noted two recent wheat shipments (French- and Romanian-origin) were detained at port for containing (non-narcotic) poppy seeds. Dozens of shipments similarly have been delayed for costly inspection and testing procedures. These two detained shipments have now been released.
“Prime Ministerial Decree No. 2992 (2016), in response to Egypt’s controversial ergot fungi policy, restructures wheat, as well as corn and soybean import procedures. The decree designates the Ministry of Trade and Industry’s General Organization for Import and Export (GOEIC) as the country’s lead authority for all inspection procedures,” the report said. “The Ministry of Trade and Industry Decree No. 24 (2017) implements the operational guidelines establishing the GOEIC as the government body responsible for wheat inspections at ports-of-origin and -destination.”
Currently all inspections at the port-of-origin are carried out by GOEIC and GASC approved private pre-shipment inspection companies, according to the report. For the public-sector tenders, the required port-of-origin inspection costs are borne by the General Authority for Supply Commodities. Upon arrival to Egypt, inspections are carried out by a tripartite inspection committee headed by the GOEIC along with inspectors from the CAPQ and the Ministry of Health.
The USDA report forecasts domestic production in marketing year 2017-18 (July/June) at 8.1 million tonnes. Imports in market year 2017-18 will come in around 11.7 million tonnes; with the GASC importing 6.3 million tonnes of this amount. The USDA forecasts wheat consumption in market year 2017-18 at 19.7 million tonnes, up 1.5% from market year 2016-17 consumption estimate of 19.4 million tonnes. Post attributes the uptick to 2.2% increase in food, seed and industrial use (FSI) consumption driven by population growth.
The report estimates that Egypt will import 6.5 million to 6.7 million tonnes in the marketing year 2018-19. These forecasted purchases are in line with average volume increases of about 500,000 to 600,000 tonnes per year observed over the past three years.