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Egypt's supply buyer ups wheat protein content requirement

State-owned buyer sets minimum protein content at around 12 per cent for Russian, Ukrainian and Kazakh wheat as traders foresee no problems meeting needs

Reuters, Monday 3 Oct 2011

Egypt's state-owned wheat buyer, the General Authority for Supply Commodities (GASC), increased the protein content requirement for wheat it asks for in tenders, traders said on Monday, citing a GASC statement.

The minimum protein content for Kazakh wheat is now 12.5 per cent, for Russian wheat 12 per cent and for other origins 11.5 per cent, a document faxed to traders and obtained by Reuters showed.

The document was dated 24 September, meaning that wheat purchased in GASC's latest tender dated 29 September fell under the new quality requirements.

GASC could not immediately be reached for comment. The firm's vice chairman, Nomani Nomani, is on a visit to Ukraine, after which he is expected to add the country as a source in tenders.

The Russian Grain Union was unmoved by the new requirements.

"I don't think the new requirements will create big problems for Russia," Alexander Korbut, vice president of the powerful lobby group, told Reuters.

"We have a good crop this year with plenty of wheat with protein content at or above 12 per cent, so traders will not have difficulties in finding the necessary volumes for shipping, although it will require additional expenses, but we will remain competitive," he said.

The union expects a Russian grain crop this year of as much as 93 million tonnes, up from 61 million in drought-hit 2010. But it has said that the share of food-quality wheat will be slightly below the average.

Since the start of the 2011/12 fiscal year on 1 July, GASC has purchased 2.34 million tonnes of Russian wheat, 180,000 tonnes of Romanian wheat and 120,000 tonnes of Kazakh wheat.

Egypt, the world's largest wheat importer, has also said it intends to double the amount of corn in subsidised bread to cut costs.

Social Solidarity Minister Gouda Abdel Khaleq said he would raise the quantity of corn to 20 per cent from the current 10 per cent.

Traders have said a similar move in the late 1990s made the quality of the bread go down.

"How can GASC raise the protein content to up quality and then up the amount of corn, which will negatively affect quality?" one trader said.

Abdel Khaleq said, however, that quality would not be affected as long as humidity levels were controlled.

Egypt consumes around 14 million tonnes of wheat annually and imports half of its needs.

It spent LE33 billion ($5.5bn) on food subsidies in the fiscal year ended on 30 June, including wheat, oils, sugar and rice. 

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