Following the controversy of rejecting wheat cargos containing allowable measurements of ergot according to Egyptian rules, traders are charging a hefty premium to Egypt amid the market confusion. Bloomberg reported Cargill Inc. made the lowest offer in a tender Friday, excluding freight costs, according to two traders familiar with the process. Still, the price to supply French wheat was $11.29 a metric ton more expensive than grain for loading. The premium is the second-biggest applied to Egypt since July. Traders are concerned that Egypt may turn away wheat containing any trace amount of ergot, despite Egyptian restrictions allowing 0.05 percent of contamination. Egypt quietly adopted a no tolerance policy, rejecting a cargo of wheat earlier this year. However, following no offers for a tender of wheat, Egypt clarified their position of allowing 0.05 percent contamination. Egypt’s rejection of the Bunge cargo prompted the company to start legal proceedings. The vessel chartered by Bunge is still anchored outside an Egyptian port, according to ship-tracking data on Bloomberg.
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