The government’s new food inspection system simplified trade after a nearly year-long row over the quarantine service’s zero-tolerance approach to ergot. Traders had said they could not guarantee zero trace and boycotted tenders, effectively shutting off the world’s biggest wheat importer from the grain trade.

The new inspection regime, launched this year, applied a more common global standard, allowing 0.05 per cent of ergot in shipments and helping regular state grain tenders to proceed.

But an Egyptian court this month ordered that the new system be suspended, although the government said it would appeal that decision and keep its inspection system in place as it did so.

The court’s written verdict, seen by Reuters on Thursday, said the new system “resulted in a breach of the (import) requirements stipulated by the agriculture ministry’s quarantine service, which banned the entry of wheat shipments containing pests that are prohibited from entering the country, including the fungus ergot.”

This opens the possibility that the quarantine service could restore its zero-tolerance rule. However, for now, the government has not empowered the quarantine service to do so.

After last year’s trade row, Egypt moved the inspection process away from the quarantine service to the trade ministry’s General Organization for Export and Import Control (GOEIC).

The agriculture ministry said last week it would not return inspection authority to its quarantine service.

A group of quarantine inspectors had challenged the new system in court, arguing it illegally handed inspections to a body ill-equipped to oversee the process, allowing imports to enter with hazardous contaminants harmful to animals and plants.

Lawyers who raised the case said the government was obliged to suspend its new inspection system during an appeal, a process that could take months.

Egypt’s state grain buyer GASC has continued its purchases on Thursday, ordering 175,000 tonnes of Romanian and Ukrainian wheat at international tender.

The purchase reflects the government’s insistence that it would not re-impose the outright ban on ergot, despite the court ruling.

Egypt said it expected wheat imports to reach about 6.2 million tonnes in the financial year starting July in a bid to boost strategic reserves for its subsidized bread programme. Egypt typically imports about 5.5 million tonnes a year.

Earlier this week, Egypt said it bought 3.4 million tonnes of local wheat from farmers, just short of the government target of about 3.5 million to four million tonnes.

— Reporting for Reuters by Arwa Gaballa and Eric Knecht in Cairo; additional reporting by Maha El Dahan in Dubai.

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Egypt last year scrapped a ban on ergot in grain imports after it effectively halted purchase tenders because trading houses refused to participate, saying the ban was an impossible requirement.

In its place, Egypt imposed a more internationally standard 0.05 per cent tolerance threshold for ergot and restructured its food inspection system, transferring responsibility for strategic agricultural imports from the agriculture ministry’s quarantine body, which favoured the ban, to the trade ministry.

A ruling scheduled for next week will scrap that new system, effectively reinstating the ergot ban, according to lawyers who were informed of the court’s decision verbally on Tuesday.

The verdict is expected to be formally announced on June 13 and is subject to appeal but must be implemented during the appeal process, said Khaled Ali, one of the lawyers on the case.

An agriculture ministry spokesman told Reuters the inspection system for grain imports remained unchanged, as did the permitted level of ergot in wheat shipments — currently 0.05 per cent.

The trade ministry declined to comment.

Return to uncertainty

The case was brought by a group of quarantine inspection employees in their capacity as citizens, not by the body itself, as well as several other parties, including some connected to the health ministry, which also takes part in inspections.

The inspectors involved said the new system illegally stripped the quarantine body of its authority and handed it to a trade ministry body ill-equipped to oversee inspections, allowing imports to enter with hazardous contaminants harmful to plant and human health.

“All that mattered to us in this, is that this decision, when it was issued, allowed for the entry of things at levels that would harm people — like ergot, ambrosia, and white mould,” said Mohamed Zaki, a quarantine inspector who raised one of the cases.

Grains traders have said a zero tolerance ergot policy makes doing business with Egypt too risky given the costly possibility that their cargoes may be rejected upon arrival.

“My worry is this decision could lead to a return to uncertainty and even a disruption of Egypt’s wheat imports just as the situation has been returning to normal,” one German trader said, echoing the sentiment of several others.

Egypt last month purchased about 500,000 tonnes of wheat in tenders held by its state-grain buyer GASC. Turnout among traders has returned to normal following several boycotts last year in response to the zero policy.

The current system was imposed by a decree in November that named the General Organization for Export and Import Control (GOEIC), which is part of the trade ministry, as the body responsible for inspecting the imports.

— Reporting for Reuters by Eric Knecht and Maha El Dahan; additional reporting by Ahmed Aboulenein and Omar Fahmy in Cairo and Michael Hogan in Hamburg.

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Prime Minister Sherif Ismail said late on Tuesday the country would look to import 500,000 tonnes of rice and 400,000 tonnes of sugar to boost reserves and keep prices in the domestic market down.

The statement came after state grain buyer GASC announced three separate tenders in the space of one day for wheat, vegetable oils and sugar.

“I would definitely say that the current plan does appear to be stocking up on imported stocks before a devaluation. We’re seeing this happening in sugar, rice, beans, and the current campaign in wheat,” one Cairo-based commodities trader said, echoing several others who spoke to Reuters.

GASC declined to comment on the issue.

Egypt, the world’s largest wheat importer, operates a massive food subsidy program to sell essential items to the country’s poorest citizens.

“We’ve received numerous inquiries from different government agencies — some military as well — and they seem quite eager to get their hands on commodities,” the trader said.

Pressure has been mounting on Egypt’s central bank to devalue its currency as the country contends with an acute dollar shortage brought on by the flight of tourists and foreign investors, major sources of hard currency that fled after the 2011 uprising.

Speculation is rife that the bank could devalue Egypt’s pound in coming days to close a widening gap with the black market rate, which has ticked up to more than 14 pounds to the U.S. dollar in recent days compared with the official rate of 8.8 pounds (C$1.31).

Essential commodities purchased by the government are among the few items that receive dollar allocations at the official rate, with the vast majority of importers forced to resort to the more expensive black market.

The additional imports are part of an “urgent plan to guarantee the stability of strategic stocks of essential food items and ensure there is at least six months in stock at all times,” a cabinet statement said.

While some traders saw the recent uptick in government tenders as proof of an impending devaluation, others said the government’s campaign may be too late, with goods likely to arrive in Egypt after a possible rate cut or currency flotation.

“Unfortunately stocks are only built with executed contracts and not with confirmed ones,” another Cairo-based trader said.

The dash to fill stocks comes as prices have been climbing on commodities such as sugar and rice in recent weeks, partly due to shortages in the domestic market, traders told Reuters.

Sugar is trading locally at almost double its price from two months ago and quantities available to the private sector have been severely limited, one trader said.

— Reporting for Reuters by Eric Knecht in Cairo and Maha El Dahan in Abu Dhabi.

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Moscow said this week it hopes to hold talks with Egypt, its top buyer, over Cairo’s failure to approve Russian wheat shipments since tightening its regulations on ergot, a common grains fungus, in late August.

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, traders said.

Zero tolerance on ergot could halt Russian wheat exports to Egypt at a time when the country has its largest wheat crop in post-Soviet history.

Egypt’s state grain buyer GASC purchased 540,000 tonnes of the grain from Russia since July 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.

The sales were originally agreed to under a rule allowing 0.05 per cent ergot, a common international standard.

Russian wheat export prices fell last week, partly due to delayed supplies to Egypt, and are expected to remain under pressure until the situation is resolved, traders said.

Egypt bought six 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 Tuesday it was concerned about the “systematic breach of international and phytosanitary requirements” in “massive supplies” of Egyptian citrus fruit set for export to Russia.

Russia has a history of using threats and limiting imports in trade disputes. It did not disclose the list of the products that could be banned and did not answer calls from Reuters.

Russia bought around US$150 million of Egyptian citrus products in 2015, about 13 per cent of its total citrus imports from across the world.

One Egyptian fruit trader told Reuters he had not heard of any Russian complaints about Egyptian citrus.

“Of course there are huge worries for us because any comment or decision will directly affect the size of contracts,” he said.

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

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

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

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.

— Reporting for Reuters by Polina Devitt in Moscow and Eric Knecht in Cairo.

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The decree, seen by Reuters, brings the ministry in line with an agriculture ministry decree issued last week reinstating the ergot ban, a policy that previously hampered the world’s largest wheat buyer’s ability to import grain.

The health ministry’s decision is the latest in a back and forth battle over the highly contentious wheat import regulation that has halted state grain tenders, raised prices, and been the subject of debate between and within ministries that have often advocated policies at odds with one another.

Ergot, a common grains fungus that can cause hallucinations in large amounts, is considered harmless in low quantities. The toxins can also be harmful to livestock consuming ergot-contaminated grain or grasses. More common international standards allow a 0.05 per cent tolerance level in grain.

Traders, who say it is nearly impossible to guarantee zero ergot, said Monday’s decree was significant as it brings all three ministries that oversee the policy — supply, health and agriculture — in line for the first time and leaves little room for the state grain buyer to relax the rules if need be.

“It’s almost impossible now to change the decree, it’s like they want to force the zero ergot and think that everyone should abide by it,” one Cairo-based trader said.

Full circle

When Egypt’s agriculture quarantine authority began rejecting shipments containing trace levels of ergot last year, it was the lone advocate of a stringent zero tolerance policy, on the margins of a debate over quality control.

At the time, the quarantine authority’s own ministry, the agriculture ministry, publicly claimed to follow the tolerance level of up to 0.05 per cent.

In recent weeks, however, and following an agriculture ministry-led study that concluded ergot could pose a threat to plant life, the quarantine’s strict position has been formally adopted by every major institution overseeing the ergot rules.

The impact on imports is already being seen. Last week, at the first tender state grain buyer GASC (General Authority for Supply Commodities) has held with zero ergot stipulated in its tender booklet, only one supplier made an offer.

GASC was forced to cancel the tender, underscoring the difficulty the country may face sustaining a massive bread subsidy programme while also demanding standards suppliers say are unattainable.

Traders said the health ministry decree will now make it harder for GASC, a long time proponent of the more tolerant 0.05 standard, to ease the rules should it continue to face low turnout at tenders.

“GASC used to base their 0.05 per cent policy on the basis of the health ministry’s position, so now that they’ve changed that it means the decision is likely final,” another Cairo trader said.

Egypt’s agricultural quarantine authority has argued that even trace amounts of ergot can contaminate plant life and give the fungus a foothold to flourish where it does not exist now.

The unified stance on ergot also comes amid what traders have said are heightened inspection measures at ports of origin in recent weeks, implemented to guarantee zero ergot.

Traders say the measures, which include re-inspecting and replacing wheat suspected of containing even single grains infected with ergot, have held up shipments at ports and added to the cost of doing business with Egypt.

“Everything is a mess in Egypt and in the ports of Constanta and Novorossiysk,” said one trader, referring to wheat shipments that have been held up in Romania and Russia.

— Reporting for Reuters by Maha El Dahan in Abu Dhabi and Eric Knecht in Cairo; additional reporting by Michael Hogan in Hamburg.

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It was the country’s first tender to purchase wheat since it reinstated its zero-tolerance ergot policy on Sunday — a move that baffled traders as implementation of the policy late last year had led to disruptions to its wheat buying program and higher prices.

Ergot produces toxic alkaloids that can lead to illness or hallucinations in large quantities, but is considered harmless to people at low levels. The toxins can also be harmful to livestock consuming ergot-contaminated grain or grasses.

The near-complete boycott at Wednesday’s tender underscores the difficulty of requiring ergot-free shipments even for a country such as Egypt, the world’s largest wheat buyer. It also calls into question Cairo’s ability to sustain a massive bread subsidy program while imposing a rule suppliers say is impossible to guarantee.

“After only receiving one offer we cancelled,” Ahmed Youssef, vice-chairman of GASC, told Reuters, with no further comment.

Trading house Venus submitted the lone offer on Wednesday, for 55,000 tonnes of Ukrainian wheat at US$179.32 a tonne on a free-on-board basis, traders said. Traders said other sellers boycotted the tender as they oppose Egypt’s policy.

GASC has in the past adhered to the more common international standard of 0.05 per cent ergot allowance, a level Egypt’s agricultural quarantine authority has criticized, arguing that even these trace amounts can contaminate plant life and give the fungus a foothold to flourish where it currently does not exist.

A total ban on the fungus imposed by the quarantine authority caused major disruptions to Egypt’s wheat imports earlier this year, with global trading houses declining to take part in its tenders.

Egypt subsequently adopted the more lax 0.05 per cent policy in July, only to reverse course on Sunday and announce it would once again not allow any ergot, an about-turn that helped push global wheat prices down.

Traders had anticipated that GASC may be forced to cancel the tender because of the poor response, though it was not legally required to do so.

A document outlining wheat specifications for the tender closing on Wednesday stated that, in accordance with an agriculture ministry decision, the tolerance for ergot fungus should be zero per cent, marking the first time GASC specifications matched the quarantine’s zero policy.

Despite the cancellation traders said low stocks could force GASC to return to the market soon.

“The stocks are very low and can probably only cover up to the second week of November and that’s including all the shipments that were booked since the last tender,” one Cairo-based trader said.

“It’s not looking good if they don’t take a decision and they’ve lost most of their credibility in the market,” he said.

The country’s renewed difficulty in purchasing wheat comes even as up to two million tonnes of the five million tonnes it announced as locally procured may be missing from stocks, the result of a local wheat-buying scandal that forced the minister of supply to resign last week.

GASC normally falls under Egypt’s supply ministry but is being run by trade minister Tarek Kabil following the supply minister’s resignation.

— Reporting for Reuters by Michael Hogan, Maha El Dahan and Eric Knecht; additional reporting for Reuters by Sybille de la Hamaide and Valerie Parent in Paris.

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The world’s largest wheat importer said on Sunday it was re-introducing its zero tolerance policy on ergot — which can lead to hallucinations in large quantities but is considered harmless at minor levels — and would apply the decision retroactively.

“The ban will be applied to every grain of wheat entering the country. As of now no infected wheat will enter either from upcoming tenders or previous ones,” agriculture ministry spokesman Eid Hawash said, giving no reason for the decision.

Just last month, Egypt said it would accept imported wheat shipments containing 0.05 per cent, a common international standard, of ergot in imports, settling a dispute with suppliers that had hampered the country’s massive purchasing program.

A Food and Agriculture Organization (FAO) risk assessment conducted earlier this year concluded that ergot posed no threat to Egyptian crops, but the agriculture ministry said at the time it would reinstate zero tolerance if future studies showed ergot affecting crops.

On Sunday, the head of the country’s plant pathology centre told Reuters a follow-up study found that ergot did pose a risk to crops if it entered the country, and that the FAO report had not taken into consideration the different strands of ergot and Egypt’s hot climate.

“There are 15 countries with ergot but we won’t stop dealing with them entirely we will just make sure that when wheat is imported from these countries it comes from areas of those countries free of ergot,” Ashraf Khalil said.

The July decision resulted in larger numbers of suppliers participating in General Authority for Supply Commodities’ (GASC) state tenders.

But Sunday’s reversal means suppliers risk having cargoes of previously agreed shipments rejected and that Egypt may face a renewed boycott of state grain tenders and raised prices. The move could hinder state grain importer GASC from making purchases needed to fill the country’s large supply gap.

Suppliers have long maintained that guaranteeing zero ergot is nearly impossible. Some told Reuters they would likely not participate in tenders following Sunday’s decision.

“It’s going to be a disaster,” one Cairo-based trader said.

GASC, which is in favour of the international 0.05 per cent standard, was not immediately available for comment.

— Reporting for Reuters by Eric Knecht in Cairo and Maha El Dahan in Abu Dhabi; additional reporting by Ehab Farouk.

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Hanafi’s resignation is the most senior-level fallout from a probe into whether millions of dollars intended to subsidize farmers were used to purchase wheat that did not exist.

“Experience has proven that being in a position of authority is no longer a picnic,” Hanafi said as he announced his resignation on state television.

Egypt, the world’s largest importer of wheat, has been mired in controversy over whether much of the roughly five million tonnes of grain the government said it procured in this year’s harvest exists only on paper, the result of local suppliers falsifying receipts to boost government payments.

If Egypt’s local wheat procurement figures were misrepresented, it may have to spend more on foreign wheat purchases to meet local demand — even as it faces a dollar shortage that has sapped its ability to import.

“It’s important that whoever comes next knows that the minister is not above accountability and will always be monitored and under the spotlight,” Nader Noureldin, a former supply ministry advisor, said.

Egypt’s supply ministry is in charge of a massive food subsidy programme and the main state grain buyer, the General Authority for Supply Commodities (GASC).

Parliamentarians who formed a fact-finding commission to investigate the fraud have said upward of two million tonnes, or 40 per cent of the locally procured crop, may be missing.

The general prosecutor has ordered arrests, travel bans and asset freezes for several private silo owners and others allegedly involved in the scandal.

While Hanafi has not been accused of directly profiting from misallocated subsidies, parliamentarians, industry officials and media commentators have in recent weeks pinned blame for the crisis squarely on his shoulders.

“Hanafi started very strong but unfortunately he trusted the wrong people who ran the ministry for their own benefit which led to huge loss of the subsidy,” said Waleed Diab, managing director of Egyptian Millers Co., one of the country’s largest private mills.

The prospect of hundreds of millions of dollars in squandered government subsidies comes as Egypt gears up for a raft of austerity measures, including various subsidy cuts agreed to as part of a US$12 billion IMF programme that could bring pain for its poorest people.

Teflon minister

Pressure has been mounting on the minister, who was appointed in 2014, ever since earlier this year when parliament began investigating whether a bumper wheat crop — nearly five million tonnes delivered by farmers versus three million to 3.5 million normally procured — may be the result of foul play.

In recent weeks parliament’s wheat commission has captured the attention of the Egyptian public, with MPs making highly publicized site visits to private silos suspected of fraud, arriving unannounced to tally missing wheat before reporting their findings to the local press.

Critics have also accused Hanafi of bungling an array of the ministry’s most critical duties.

From smart cards for bread distribution that were hacked, wasting millions of dollars in subsidized flour, to the ministry’s failure to purchase rice last harvest — an oversight that led to nationwide shortages of subsidized rice and price spikes that hit the country’s poorest — Hanafi has drawn a broad coalition of critics.

Criticism took an unexpected turn last week, when fiery media personality and MP Mostafa Bakry accused Hanafi on television of using seven million Egyptian pounds (C$1.02 million) in state funds to maintain a residency at a posh downtown Cairo hotel.

The minister later said in a statement he had paid for the long-term hotel residence with his own personal funds.

— Reporting for Reuters by Eric Knecht and Maha El Dahan; additional reporting for Reuters by Asma Alsharif.

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Earlier this year traders boycotted state wheat tenders after the country’s agriculture quarantine authority began to apply a zero tolerance policy for ergot, a common grain fungus.

Suppliers said at the time the standard was impossible to meet.

The ministries of supply and agriculture later assured suppliers they would follow a 0.05 per cent tolerance policy, a widely applied international standard.

This pledge has now been called into question after renewed quarantine authority rejections — 30,000 tonnes of Polish wheat and 10,000 tonnes of Canadian wheat since April — despite their levels of ergot falling below 0.05 per cent, traders said.

“The ergot problem was sleeping. It has not been resolved and it remains a serious problem,” one European trader said.

The Polish wheat was imported by trading firm Venus while the Canadian grain was purchased by Five Star.

The Polish wheat, rejected twice since April, contained just 0.02 per cent of ergot, a company source told Reuters.

Eager to have their stalled wheat accepted, the company took out advertisements in three state newspapers last month pleading with President Abdel Fattah al-Sisi to intervene and resolve the ergot crisis, the source said.

As Egypt’s local wheat procurement comes to a close this month and as the country prepares to re-enter the international market, traders say the renewed rejections could make purchasing difficult.

Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), declined to comment on the two rejected shipments or on the zero ergot tolerance policy.

“The weather problems in France, in Europe and the Black Sea are favourable to ergot development. This could make supplying GASC very difficult next season,” another European trader said.

FAO report

Egypt’s agriculture ministry said it had received a crucial study on ergot conducted by the United Nations Food and Agriculture Organization (FAO) earlier in the year.

The report was commissioned to help standardize the country’s regulations and ease the conflict between rules governing the agricultural quarantine authority and the supply and agriculture ministries.

“The report is with the minister,” Eid Hawash, spokesman for the ministry told Reuters, ending weeks of speculation by traders on the fate of a study that was seen as potentially resolving the standoff over the country’s import policy.

Hawash stressed that the FAO report alone would not be the sole factor in determining any change in policy and said he was unaware of what recommendation the report contained.

GASC said it had no information on the contents of the report.

In the meantime, government sources said the zero tolerance policy would continue to be applied by the agriculture quarantine authority on both public and private sector shipments, signalling the standoff still existed.

Traders, many of whom have opted to sit out state tenders since the wheat rejections earlier this year, said that purchasing from abroad will likely get even more expensive for Egypt in coming months.

“The risk premium they were already paying a few months ago will be even higher,” one trader added.

— Reporting for Reuters by Maha El Dahan in Abu Dhabi and Eric Knecht in Cairo. Additional reporting for Reuters by Michael Hogan, Valerie Parent and Sybille de La Hamaide.

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Alarm bells began ringing in Egypt when a 63,000-tonne wheat shipment from France arrived in December.

Traces of the ergot fungus were found, and even though they were within the 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.

Since then, Egyptian authorities have sent mixed messages about their policy on the fungus.

The ministry of supply and the main state buyer, the General Authority for Supply Commodities (GASC), maintain that imports of wheat may contain up to a 0.05 per cent level of ergot, a common international standard, while the agriculture ministry insists on a new zero tolerance approach.

The leader of the anti-ergot stance is Saad Moussa, head of the central administration of the agriculture quarantine authority. He has warned even the most minute quantities of ergot are unacceptable.

Traders eager to capitalize on Egypt’s lucrative market are shaking their heads over the dispute that has paralyzed decision-making among officials charged with ensuring the smooth supply of a strategic commodity vital for feeding millions.

So far, Egyptians appear insulated by the ergot tug of war. Egypt says it has enough strategic wheat supplies to last until May 11. But any hint of disruption is cause for concern.

“The problem is not that easy and I don’t think the agriculture ministry will have the upper hand because it’s a crucial issue,” said Hesham Soliman, president of Med Star For Trading.

The ergot saga has already prompted him to postpone his own 25,000-tonne shipment.

“It’s the national security of food and I don’t think that they can play with it…If they start to reject vessels, it will definitely affect the supply,” Soliman added.

Former president Anwar Sadat triggered riots when he cut the bread subsidy in 1977. When Egyptians rose up against Hosni Mubarak’s rule in 2011, one of their signature chants was “bread, freedom and social justice.”

The fate of the French wheat shipment to Egypt remained uncertain on Tuesday as Egypt’s agriculture ministry again insisted on a strict anti-ergot fungus policy, contradicting assurances made to wheat suppliers by the country’s ministry of supply only last week.

Other cargoes booked for the same shipment date in the Oct. 29 tender did not appear to face similar problems. One shipment of French and another of Romanian wheat have already unloaded while a Polish wheat shipment is currently unloading at an Egyptian Red Sea port, according to shipping data.

The French shipment was re-tested, but GASC said although it had received the test results no final decision had been made.

“We have the results of the re-testing but we haven’t been notified of any final decision,” GASC vice-chairman Mamdouh Abdel Fattah told Reuters.

Should the French shipment finally be rejected, traders may be hesitant to supply in the future because shipments sent to Egypt are large and difficult to re-sell.

“It is still absolute stalemate and there could be resales from GASC tenders soon if it is not possible to unload the ships,” said a European trader.

At GASC’s wheat tender last week the 0.05 per cent ergot ceiling was maintained, and trading houses — some of which had threatened to boycott future tenders if the fungus was banned entirely — participated, though in lower numbers than usual.

Still, the agriculture ministry insisted it would continue to reject all shipments of wheat containing any level of ergot.

“We are completely prohibiting the entry of ergot. This is the final word and this is in accordance with ministry of agriculture legislation,” ministry spokesman Eid Hawash told Reuters.

Egyptians are not panicking but local newspapers have warned ergot can cause cancer, putting the Ministry of Supply on the defensive even though the 0.05 percent level had long been accepted.

— Reporting for Reuters by Eric Knecht in Cairo and Maha El Dahan in Abu Dhabi. Additional reporting for Reuters by Michael Hogan in Hamburg and Sybille de la Hamaide and Valerie Parent in Paris; writing by Michael Georgy.

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