Minister of Supply Khaled Hanafi told Reuters Ahmed Youssef has been formally appointed as the new vice-chairman of the General Authority for Supply Commodities (GASC), having said earlier on Sunday that he was the top candidate for the job.

Reuters exclusively reported on Tuesday that the world’s largest wheat importer was changing the head of GASC, its main state grain buyer.

The appointment comes as GASC gets ready for a new wheat importing season with no resolution to a long-standing dispute over the amount of ergot, a common grain fungus, it will allow in wheat purchased from abroad.

Ahmed Youssef used to head the central administration of purchasing at GASC before Sunday’s appointment.

The vice-chairman of GASC oversees the strategic buying of wheat for Egypt, which operates a massive bread subsidy programme that feeds tens of millions of poor Egyptians.

GASC tender purchases are closely watched by global wheat markets because of their influence on price direction.

Mamdouh Abdel Fattah has been in charge of the agency since early 2013 and has said he is moving to head another state commodity firm, the Food Industries Holding Company.

GASC’s new head starts his purchasing job as Egypt continues to baffle global wheat markets with mixed signals concerning the amount of ergot fungus allowed in its imports.

Egyptian agricultural quarantine authorities’ refusal to let in a single grain of wheat infected with ergot, a common fungus, has wreaked havoc on the world’s largest wheat buyer’s tenders for months and is at odds with a more commonly accepted international standard of up to 0.05 per cent.

Reuters reported on June 23 that a legal snag had held up an anticipated decree by the prime minister that would have resolved the issue through enforcing the global standard.

“The ergot situation is still vague and it will not be clear whether GASC will resume its tenders under the current circumstances until the new vice chairman is announced,” one Cairo-based trader said.

Another Cairo-based trader said GASC could announce a tender soon after the Eid al-Fitr holiday ends next week.

— Reporting for Reuters by Ehab Farouk; additional reporting and writing for Reuters by Maha El Dahan.

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As head of the agricultural quarantine agency Moussa imposed a zero tolerance policy on ergot, a common grains fungus. This was at odds with the ministry of agriculture and supply backing a more common international standard that allows trace levels.

“Essam Fayed the minister of agriculture has appointed Ibrahim Ahmed Imbabi, head of the Plant Pathology Research Institute, to head the central administration of the agricultural quarantine authority,” a statement from the ministry said.

The ministry said Imbabi’s appointment was part of a plan to “restructure the ministry of agriculture and its various sectors, to develop and improve its performance.”

One source close to the matter who asked not be named due to the sensitivity of the issue said Moussa was relieved of his post due to the controversy he caused over ergot.

Many traders, who say guaranteeing zero ergot is impossible, have declined in recent months to make offers in state wheat tenders, saying it was too costly to risk having their shipments later turned away by Moussa’s quarantine authority.

The disrupted wheat tenders have raised the possibility of a shortage of grain which could pose a political problem for President Abdel Fattah al-Sisi as the impoverished population relies on highly subsidised bread.

Traders welcomed the decision to replace Moussa and some said purchase tenders would return to normal as a result.

“I can say that for the majority of suppliers they will be more willing to participate in tenders now,” one Cairo-based trader said.

On Thursday, sources told Reuters the agricultural quarantine authority was considering halting inspections of imported wheat abroad.

Egypt, the world’s largest importer of the grain, typically sends its inspectors to ports abroad to clear wheat the government has purchased ahead of its shipment. Cancelling this would have increased the risk to traders that wheat would be rejected after it had been shipped.

On Friday, the agriculture ministry said it would continue to send its experts abroad as normal.

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

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