UPDATE – Egypt’s business digest Sept. 19: 63% of Euromoney participants see real estate sector “safe” for investment; Timeline: Egypt’s on again, off again relationship with ergot
Euromoney Egypt 2016

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Timeline: Egypt’s on again, off again relationship with ergot

Egypt’s ability to import one of its most essential commodities, wheat, has been thrown into question amid repeated failed tenders, a result of suppliers shunning the world’s top buyer because of its strict policy on the ergot fungus.

Over the past year Egypt has flip-flopped on its policy towards the common grain fungus, which can lead to hallucinations but is considered harmless at minor levels.

Last month’s decree reinstating zero tolerance for ergot rattled world grain markets and threatened to disrupt Egypt’s bread subsidy program, on which tens of millions of the country’s poorest rely.

Below is a timeline of the controversy: 

December 2015: A 63,000-tonne shipment of French wheat sold by Bunge to Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), is rejected by the agriculture quarantine authority for containing trace levels of ergot.

Jan. 6, 2016: Egypt’s quarantine head, Saad Moussa, says the authority is applying a zero-tolerance ergot policy despite the supplies ministry and GASC stipulating 0.05 percent tolerance.

Jan. 14, 2016: The supplies ministry insists it will keep its 0.05 percent tolerance level for ergot.

Jan. 31, 2016: GASC confirms Bunge’s French wheat shipment has been rejected, saying it contained an ergot level higher than 0.05 percent. Bunge denies this.

Feb. 3, 2016: Egypt’s agriculture ministry says it will accept 0.05 percent ergot in wheat shipments, while the quarantine authority, an agency that falls under it, says anything above zero will be turned away.

Feb. 7, 2016: After two GASC purchase tenders are canceled due to low turnout, Egypt seeks to reassure the global market. The supplies and agriculture ministries stress they will adhere to a 0.05 percent ergot level.

Feb. 9, 2016: Bunge launches legal proceedings against GASC.

Feb. 17, 2016: Under mounting pressure from trader boycotts of its purchase tenders, GASC distributes a letter to suppliers from the agriculture ministry stating it will adhere to a 0.05 percent tolerance level.

March 2, 2016: Reuters reveals agricultural quarantine continues to apply zero tolerance in part because of an old decree governing it that calls for zero ergot. That is at odds with a separate regulation, used by GASC, that allows 0.05 percent.

March 6, 2016: Egypt replaces Moussa, the head of the agriculture quarantine authority and the man who strictly applied the zero-tolerance policy. Ibrahim Imbaby replaces him.

March 7, 2016: Egypt’s agriculture ministry says it has assigned an expert from the Food and Agriculture Organization (FAO) of the United Nations to conduct a risk assessment on ergot in order to bring the country’s laws into harmony.

March 8, 2016: Imbaby says he will, like his predecessor, apply a zero-tolerance policy until a new law is passed.

July 4, 2016: A decree is passed by the agriculture ministry allowing quarantine to accept 0.05 percent ergot.

July 13, 2016: The agriculture ministry reveals that an FAO study concluded ergot is not a threat to Egyptian crops, but says the decision can be amended if future studies indicate harm.

Aug. 25, 2016: Egypt’s supplies minister, Khaled Hanafi, who had defended the 0.05 percent policy, resigns on the back of a wheat corruption scandal.

Aug. 28, 2016: Egypt’s agriculture ministry imposes a new decree reinstating the total ban on ergot. The ministry cites a locally conducted follow-up study that finds the fungus to be a threat to Egyptian crops.

Aug. 31, 2016: GASC changes its tender specifications, bringing them in line with quarantine’s zero-tolerance policy on ergot for the first time. Global suppliers stage a boycott and GASC is forced to cancel a tender.

Sept. 5, 2016: Egypt’s health ministry adopts a zero-ergot stance, bringing all three ministries that oversee the policy in line for the first time and making it harder for GASC to backtrack.

Sept. 7-9, 2016: Egyptian inspectors reject a 63,000-tonne Romanian wheat shipment at its port of origin for trace levels of ergot even though the cargo had been contracted under the old ergot rules. It is the first cargo rejected at its port of origin.

Sept. 16, 2016: GASC cancels its second consecutive wheat tender after failing to receive any offers and as a 60,000-tonne Russian wheat shipment is rejected at Novorossiisk after weeks of inspection.

Sept. 16, 2016: Russia says it will ban imports of fruit and vegetables from Egypt from Sept. 22, apparently in retaliation for held-up shipments of Russian wheat.

Sept. 19, 2016: GASC holds its third wheat tender under the zero-ergot rules even as suppliers insist they will not make offers. Traders speculate the failed tenders are a strategy for GASC to convince the government to overturn the zero-tolerance policy as grain reserves come under pressure.

 

Egypt expects 2-3 IPOs in first year of privatisation plan – NI Capital CEO

Egypt expects to privatise two or three state-owned companies via listings on the stock exchange in the first year of a privatisation programme, the chief executive of government-owned NI Capital said on Monday.

The programme will last for three to five years and will start with state-owned oil companies but will also include state-owned banks, said Ashraf El-Ghazaly.

NI Capital is a government-owned, privately managed financial institution that is part the National Investment Bank. It acts as a consulting authority for the government and manages governmental investment funds.

The state owns vast swathes of the economy, including three of its largest banks along with much of its oil industry and huge parts of its real estate.

The economy has been struggling to recover since a popular uprising in 2011 drove foreign investors and tourists away. Years of political instability has hit growth in the Arab world’s most populous state and halved its currency reserves.

The last time state-owned companies were listed on the exchange was in 2005 when shares were floated in Telecom Egypt, the state’s landline monopoly, and oil companies Sidi Kerir Petrochemicals and AMOC.

 

63% of Euromoney participants see real estate sector “safe” for investment

A Euromoney referendum showed that 63 percent of participants have voted yes to investing in real estate sector in Egypt, Youm7 reported.

Euronmoney Egypt 2016 conference kicked off Monday to tackle challenges facing the country’s economy.

 

55% say USD exchange to reach 11 EGP: Euromoney referendum

A total of 55 percent of participants at Euronmoney Egypt voted Monday that the dollar exchange rate will reach 11 EGP, Youm7 quoted officials at the conference.

 

Euromoney Egypt 2016 conference kicks off Monday

The two-day Euromoney Egypt 2016 conference kicked off on Monday, tackling the challenges against Egypt’s economy.

The conference will discuss Egypt’s 12 billion loan from the International Monetary Fund (IMF), according to the official website of the Euromoney.

 

Egypt in talks to obtain $2 bln in financing from China

(Reuters) Egypt is in talks with China to obtain $2 billion in financing, Deputy Finance Minister Ahmed Kojak said, without giving further details.

“All the details are with the central bank,” he said.

Egypt has reached a staff level agreement for a $12 billion loan program from the International Monetary Fund and must secure around $6 billion in bilateral financing to obtain approval for the program.

Christopher Garnett, Director of the Euromoney Conferences, said that signing the deal betweeb Egypt and the IMF is a transitional step for the Egyptian economy.

 

Egypt talks to receive 1.5 bln loan from WB AFDB

International Cooperation Minister Sahar Nasr announced that Egypt is negotiating to get 1.5 billion in soft laon from the World Bank and the The African Development Bank.

Nasr’s statement came during her speech at the Euromoeny conference in Cairo. She noted this amount of money is the second installment from the two banks.

 

Egypt’s Minister of Finance heads to UAE to promote new investments in Egypt

Egypt’s Minister of Finance, Amr Garhi, announced that he would travel to the United Arab Emirates Monday to interview a number of investors and officials in order to promote investment opportunities in Egypt, and display positive developments witnessed by the Egyptian economy, state-owned news agency MENA reported.

 

EGX indexes go up at opening session in Monday trading

The Egyptian Exchange (EGX) indexes went up at opening session of Monday’s trading, data from the EGX showed.

The main index, EGX30 increased 0.32 percent, while mid- and small-cap index EGX70 up by 0.28 percent.

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