Egypt has tested a third Russian wheat shipment for dead insects, a newspaper reported on Wednesday, after quality fears led it to quarantine over 80,000 tonnes of wheat from its main supplier in the last two weeks.

The shipment held yesterday (May 20) was of 30,000 tonnes of Russian wheat that arrived on May 13 in Port Said on the Mediterranean coast, independent Egyptian newspaper Al Masry Al Youm quoted an unnamed port source as saying.

Officials from Egypt's main state wheat buyer, General Authority for Supply Commodities (GASC), were not available for comment. An Agriculture Ministry official declined to comment, citing orders from the state prosecutor.

Egypt, among the world's largest wheat importers, has bought almost a quarter of the wheat exported by Russia in the current season. Overall trade between the countries is approaching $4 billion annually and is seen doubling in the next few years.

Egypt's state news agency reported last week the state prosecutor had ordered the seizure of all Russian wheat for checks over health concerns after a complaint that spoiled wheat had entered Egypt through the Red Sea port of Safaga.

Industry sources have said it is unrealistic for Egypt to seize wheat that has already been distributed and any measures would likely be confined to wheat in ports.

Foreign Minister Ahmed Aboul Gheit, on a visit to Moscow, said yesterday Egypt should resolve its grain dispute with Russia in the near future and would continue to import grain.

"The relevant Egyptian bodies must determine whether there is a high level of bugs in the shipment and whether the shipment corresponds fully to international standards," he told reporters through an interpreter.

"I hope this matter will be resolved in the immediate future and that Egypt will continue to import grain from Russia."

Russian Foreign Minister Sergei Lavrov, after meeting his Egyptian counterpart, said: "Egypt and Russia have a bilateral mechanism for controlling the quality of agricultural products ... This is a normal working situation."

No official complaint

Russia's animal and plant health watchdog said it had carried out its own investigation into wheat shipments to Egypt and said the grain met all the required quality standards.

The watchdog, Rosselkhoznadzor, said it carried out its own test because of "the possibility of honest mistakes, as well as dishonest actions from one or other organisations -- not excluding surveyors and commercial enterprises".

Rosselkhoznadzor and the Russian Grain Union, a powerful industry lobby, said separately they had received no notification from their own Agriculture Ministry or Egyptian authorities over problems with wheat quality.

"We still believe that the quality of our grain corresponds to what export contracts demand," said Russian Grain Union President Arkady Zlochevsky.

In addition to the 30,000 tonnes held at Port Said, Egypt has also quarantined roughly 52,000 tonnes of Russian wheat in Safaga and another 30,000 tonnes at Damietta on the north coast.

Much of the wheat Egypt buys goes into its subsidised bread programme, which allows millions to survive on low salaries.

Zlochevsky said Egypt's move on Russian wheat appears to be an attempt to force Russian suppliers to sell at lower prices.

"Egypt will not renounce Russian wheat because it is satisfied with its quality and price," said Nikolai Demyanov, commercial director of the International Grain Company, a Russian division of commodities trader Glencore.

Egypt has bought over 5 million tonnes of overseas wheat through GASC in the current fiscal year, much of it from Russia.

Russia shipped 3.71 million tonnes of wheat to Egypt between July 2008 and March 2009, a more than 10 per cent increase on the entire 2007/08 season, data from analyst group SovEcon shows. – Reuters