ABU DHABI, Feb 16 (Reuters) – Egypt’s agricultural quarantine authority has rejected a shipment of Canadian wheat, saying it contained traces of the fungus ergot, a trade source said and official documents obtained by Reuters showed.

The move by the quarantine authority is the latest in a series of rejections, which have caused serious concerns over Egypt’s tough new quality rules and disrupted the country’s massive wheat imports.

The first alarm was raised when a 63,000-tonne wheat shipment arrived in Egypt from France in December.

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Traces of the ergot fungus were found in the wheat supplied by Bunge, and even though they were within permissible limits stipulated by the country’s main state wheat buyer, the agriculture ministry warned that any level of the common fungus would be flatly rejected.

Bunge has since launched legal proceedings against Egypt.

Now, the vessel carrying Canadian wheat, which is at an Alexandria port, has been rejected twice by the agricultural quarantine authority also on ergot concerns. The second letter of rejection issued in February stated that the wheat contained ergot but did not give a percent.

Egypt, the world’s largest wheat importer, has been facing difficulties purchasing the grain in its import tenders since the Bunge shipment rejection as suppliers have refrained from making offers or added risk premiums to prices.

Egypt’s supply ministry, which includes the state grain buyer GASC, has usually permitted a 0.05 percent level of ergot in imports but the agricultural quarantine authority has insisted on a zero tolerance policy.

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In a bid to win back confidence, the ministries of supply and agriculture held a joint press conference on Feb. 7 assuring suppliers their wheat shipments can contain up to 0.05 percent of ergot, a common global standard GASC traditionally used in its import tender specifications.

But the Feb. 8 date of the second rejection for the Canadian wheat cargo shows the quarantine authority was out of step with this policy.

“The second rejection letter came one day after the press conference was held by the ministry of supply and the ministry of agriculture,” the trade source said.

After the initial rejection, the supplier conducted three independent ergot tests on samples, which clearly show the ergot level well below 0.05 percent yet a second rejection was issued.

“A final rejection is expected to be issued next week,” the source said.

Egypt’s agricultural quarantine authority has started applying stricter measures to other commodities as well.

On Monday, trade sources told Reuters four soybean shipments were rejected in Egypt due to the presence of ambrosia seeds.

Saad Moussa, the head of the central administration of the quarantine authority, has declined to talk to Reuters since making exclusive comments on Jan. 6 about his zero tolerance policy towards ergot.