Govt. inspectors disrupt wheat shipments into Egypt

EGYPT – Wheat shipments to Egypt, the world’s largest buyer, have been disrupted by a dispute involving government inspectors angered by a ban on the expenses-paid foreign trips, as they had previously approved cargoes at their ports of origin.

The trips, as funded by exporters, have been cancelled as part of Egypt’s efforts to streamline imports worth more than US$1bn a year, where the traders said the new system had backfired as inspectors were rejecting cargoes at Egyptian ports on arbitrary and unpredictable grounds.

According to Reuters, difficulties for importers are the result of disputes over the right to inspect cargoes abroad, where until recently government quarantine inspectors enjoyed fully-funded trips, dinners and shopping at the expense of supply companies looking to secure safe passage for their wheat.

The high standards applied to grains upon arrival, cause inspectors to drive up costs in a bid to undermine inspection companies that replaced them abroad, traders said.

Suppliers said uncertainty had prompted them to add premiums of up to US$500,000 per cargo to hedge against risks.

With Egypt expecting to buy around 7million tonnes of wheat in the fiscal year that began in July, these premiums add millions of dollars to the government’s food subsidy bill.

Wheat traders said the government bodies involved were to sit down and thrash out standards all sides can agree on, as the supply of wheat cannot flow for fear of unrest.

In an interview at the offices of the General Organization for Export and Import Control (GOEIC), Ismail Gaber, who heads the agency that now has the final word on wheat inspections, he told Reuters the travel regime had raised suspicions of corruption that he would rather keep civil servants away from.

But having lost their travel benefits, the inspectors are making their presence felt.

Since January, when the new inspection regime came online, inspectors in Egypt have subjected nearly all shipments to costly processes before being approved at Egyptian ports, which add tens of thousands of dollars in costs.