Officials disrupt Egypt’s wheat supplies in protest to losing jollies

By RJ Whitehead

- Last updated on GMT

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iStock

Related tags: International trade

Government inspectors furious at losing their travel perks are behind the disruption of wheat shipments to the world’s biggest buyer.

The officials, who have been stopped from taking expenses-paid foreign trips as part of Egypt’s efforts to streamline imports worth over US$1bn a year, have been showing their anger by “rejecting cargoes at Egyptian ports on arbitrary and unpredictable grounds​,” according to Reuters.

Citing grains trade sources, the news wire said the new system, which was introduced last year to prevent Egyptian officials from travelling overseas, has backfired.

The sources reported that importers are now facing difficulties as a result of infighting 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. 

By applying higher standards to grains on arrival to Egypt, the inspectors are now driving up costs in a bid to undermine the private inspection companies that replaced them abroad, the traders said. 

Reuters also reported that the uncertainty has prompted exporters to add premiums of up to US$500,000 per cargo to hedge against risks, in turn adding millions of dollars to the government’s food subsidy bill.

According to the sources, the government inspectors would enjoy lavish hospitality on their trips abroad, and would often hold exporters to ransom over issues to do with their own comfort.

One example referred to officials holding up a US$6m shipment of grain from a Ukrainian port because their hotel would not allow them to check out late. The affair reportedly cost the company US$8,000 in port fees.

Related topics: Markets, Supply chain, Middle East, Bakery

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