Russia Threatened To Ban Egyptian Citrus As Egypt Banned Wheat From Russia

Wheat is seen in a field during the harvest on Qalyub farm in the El-Kalubia governorate, northeast of Cairo, Egypt, May 1, 2016. REUTERS/Amr Abdallah Dalsh/File Photo

Russia has accused Egypt of “bargaining” as it banned wheat imports from Russia due to contamination.

Russian news agencies reported that an official in the Agriculture Ministry Vladimir Volek said that Egypt, “is unable to halt the imported Russian wheat completely, it is a bargaining process, they want to negotiate but we don’t know what exactly they want to talk about,” said Al-Hayat .

In response, Russia threatened to ban Egyptian citrus imports, a move that could escalate a trade dispute over exports of Russian wheat to the world’s largest importer of the grain, reported Reuters.

Cairo didn’t approve Russian wheat shipments as it has been tightening its regulations on ergot, a common grains fungus, since late August.

Egypt’s state grain buyer GASC purchased 540,000 tonnes of the grain from Russia before tightening its import restrictions on ergot, banning the fungus entirely and saying the new rule would apply retroactively, affecting hundreds of thousands of tonnes yet to be shipped.

Traders said that several cargoes suspected of containing trace levels of the fungus have since been held at Russian ports, awaiting a decision from Cairo over whether to allow them to pass under the old rule.

Zero tolerance on ergot could halt Russian wheat exports to Egypt at a time when the country has its largest wheat crop. The sales were originally agreed to under a rule allowing 0.05%ergot, a common international standard.

As a result of the delayed supplies to Egypt, Russian wheat export prices fell last week.  Traders said that delayed supplies are expected to remain under pressure until the situation is resolved.

Egypt bought 6 million tonnes of Russian wheat in the 2015-16 marketing year, which ended on June 30, a quarter of Moscow’s total wheat exports for the period.

Russia’s food safety watchdog Rosselkhoznadzor said that it was concerned about the “systematic breach of international and phytosanitary requirements” in “massive supplies” of Egyptian citrus fruit set for export to Russia.

In fact, Russia has a history of using threats and limiting imports in trade disputes.

In 2015, Russia bought around $150 million of Egyptian citrus products, about 13 % of its total citrus imports from across the world.

One Egyptian fruit trader said that he had not heard of any Russian complaints about Egyptian citrus. He said,” Of course there are huge worries for us because any comment or decision will directly affect the size of contracts.”

The head of Egypt’s agriculture quarantine said it had received no notification from Russia about the “systemic breaches” of its fruit.

Quarantine head Ibrahim Imbaby said, “The Egyptian agriculture quarantine will respond to this forcefully and based on scientific grounds.”

Dmitry Rylko, the head of IKAR consultancy said, “Еgypt is the largest customer for Russia. Everything is quite gloomy with its absence on the market.”

A source at Russia’s Black Sea port of Novorossiisk said he did not expect the delayed wheat shipments to see any progress until the end of Egypt’s Eid al-Adha holiday later this week.