Cairo, May 13 - Egypt's state prosecutor ordered the seizure of all Russian wheat for checks over health concerns, Egyptian state media said on Wednesday, in what Russia's grain lobby said was an attempt to influence prices.
The prosecutor made the move after a complaint that a quantity of spoiled wheat unfit for human consumption had entered the Red Sea port of Safaga without proper quality control approvals, state news agency MENA said.
"The state prosecution ordered the seizure of all quantities of wheat imported to the country from Russia, whether it is still at Safaga port or has been released to the various provinces," MENA said.
Industry sources, however, say it was unrealistic for Egypt to seize wheat that had already been distributed in the country, and that any measures would likely be confined to wheat currently in Egyptian ports, especially at Safaga.
Most Russian wheat is unloaded at ports on Egypt's northern Mediterranean coast. There was no immediate comment from Egypt's main wheat buyer, GASC.
Egypt is one of the world's top wheat importers and through GASC has bought over 5 million tonnes of wheat in the current fiscal year, much of it from Russia. Egypt is currently the biggest consumer of Russian wheat.
HELD IN QUARANTINE
MENA said the complaint received by prosecutors concerned a specific shipment of wheat imported by Egyptian Traders, which regularly imports wheat for GASC, and that officials from both GASC and the importer had been summoned by prosecutors. A wheat trader familiar with the matter said the shipment in question was of 52,000 tonnes that had been held in quarantine because of "some impurities".
"However this problem is usually dealt with by fumigating or sieving, and discarding the impurities," the trader said, asking not to be named because of the sensitivity of the issue.
Much of the wheat Egypt buys goes into its subsidised bread regime, a main component of its economic policy that allows millions to survive on low salaries and wards off discontent.
MENA said samples from the seized wheat would be tested against standards agreed upon by GASC and Egyptian Traders, and to check whether the complaint was true.
The head of the Russian Grain Union, Arkady Zlochevsky, said there was nothing wrong with Russian wheat and accused Egypt of trying to force Russian suppliers to sell at lower prices.
"So far we have had no complaints about the quality of Russian grain," he said. "All grains we ship to Egypt fully correspond to conditions, including grade and quality, specified in export contracts."
"The problem is not the quality, but an attempt to play with prices," Zlochevsky said.
Geneva-based analyst James Dunsterville from Agrinews said said he doubted that was the case: "I think this is internal politics and not a question of Egypt trying to renegotiate prices knowing that the market has gone up since the last time they bought."