Egypt ruling to reinstate ergot ban renews wheat import uncertainty

Egypt’s state grain buyer expecting to import around 7 million tons of wheat in the fiscal year that began in July. Egypt has to ship in wheat from other producers since local production is not enough for the production of heavily subsidized bread, the country’s main staple food. (Reuters)
Updated 15 November 2017
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Egypt ruling to reinstate ergot ban renews wheat import uncertainty

DUBAI/CAIRO: Egypt's agriculture ministry is awaiting instructions from the cabinet after a court ruling reinstating a ban on wheat imports containing the common ergot fungus, it said on Wednesday, renewing uncertainty over the policy.
Egypt, the world's largest wheat buyer, stunned grain markets last year when it began imposing a zero tolerance level on ergot, leading suppliers to boycott state tenders until it adopted a 0.05 percent tolerance level, a common international standard.
Tuesday's court ruling cancelled that decree, according to a lawyer that raised the case.
The agriculture ministry, which heads a quarantine service that has argued that even traces of ergot can harm plant and animal health, said any policy adjustment was up to the cabinet.
"The ruling was against a decision that was issued by the cabinet so we have to await directions from there to know whether it will affect our process," Hamid Abdel Dayem, spokesman for the ministry told Reuters. "Until then it is business as usual," he said.
Dayim said the court ruling, if applied, would be retroactive, suggesting it could affect cargoes that have already been contracted for under the old specifications that allowed for up to 0.05 percent.
If implemented, the court order would restore a strict import rule that suppliers have said is impossible to guarantee and which has them led them to add hefty premiums to their tender bids to account for the added risk of cargo rejection.
The flow of wheat in Egypt is politically sensitive because it is used by the government to supply a sprawling bread subsidy program relied on by tens of millions of Egyptians at a time of economic austerity.


Volvo quits Iran as US sanctions pressure mounts

Updated 25 September 2018
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Volvo quits Iran as US sanctions pressure mounts

  • Volvo cannot get paid in Iran due to US sanctions
  • Plans were for at least 5,000 trucks to be assembled in Iran Saipa Diesel says zero Volvo trucks assembled since May

STOCKHOLM, Sweden: Swedish truck maker AB Volvo has stopped assembling trucks in Iran because US sanctions are preventing it from being paid, a spokesman for the company said on Monday.
The sanctions against Iran, reimposed on Aug. 6 by US President Donald Trump after his decision to pull out of a nuclear deal with Tehran, have forced companies across Europe to reconsider their investments there.
Volvo spokesman Fredrik Ivarsson said the trucks group could no longer get paid for any parts it shipped and had therefore decided not to operate in Iran in another blow to the country’s car industry, which unlike the energy and banking sectors, had managed to sign contracts with top European firms.
“With all these sanctions and everything that the United States put (in place) ... the bank system doesn’t work in Iran. We can’t get paid ... So for now we don’t have any business (in Iran),” Ivarsson told Reuters by telephone.
Before the sanctions were reimposed, Volvo had expressed an ambition for Iran to become its main export hub for the Gulf region and North Africa markets.
The European Union has implemented a law to shield its companies, but the sanctions have deterred banks from doing business with Iranian firms as Washington can cut any that facilitate such transactions off from the US financial system.
Volvo was working with Saipa Diesel, part of Iran’s second-largest automaker SAIPA, which was assembling the Swedish firm’s heavy-duty trucks from kits shipped to Iran.
Ivarsson said Volvo had no active orders in Iran as of Monday.
A commercial department manager at Saipa Diesel confirmed that sanctions had prompted Volvo Trucks to terminate their partnership agreement.
“They have decided that due to the sanction on Iran, from (May) they couldn’t cooperate with us. We had some renovation planned in Iran for a new plant but they refused to work with us,” said the manager, who declined to be identified.
More than 3,500 Volvo trucks had been assembled by Saipa Diesel in the year to May, but none had been assembled in this financial year although the original deal was for at least 5,000 trucks, the manager told Reuters.
Swedish truckmaker Scania, which is owned by Volkswagen , said it had canceled all orders that it could not deliver by mid-August due to sanctions, while French carmaker PSA Group began to suspend its joint venture activities in Iran in June.
Germany’s Daimler has said it is closely monitoring any further developments, while carmaker Volkswagen has rejected a report that suggested it had decided against doing business in Iran.