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UPDATE 1-No Egypt wheat decision after France visit-sources

Published 01/15/2010, 11:27 AM
Updated 01/15/2010, 11:30 AM

* GASC visit to France led to no immediate action

* French lobby seeking change in Egypt wheat tender rules

* GASC vice chairman's 5-day visit in France ended Friday

(Adds details, quotes, background)

By Valerie Parent

PARIS, Jan 15 (Reuters) - Egypt's state wheat buyer GASC has not yet decided whether it will change rules that hamper French shipments after a top official from the organisation visited France this week, sources close to the situation said on Friday.

GASC's vice chairman Nomani Nomani spent five days in France after being invited by France Export Cereales, a body promoting French cereals abroad, to visit port facilities and a grain stocker, and meet industry and government officials.

"It was a visit for work purposes not negotiations... so it is not a surprise that there has been no announcement," a source told Reuters.

"I think it's still too early to draw conclusions. The comments they (GASC) made leave all options open to make the balance shift in one way or the other."

Egypt is the world's largest wheat importer.

Its international tenders have been a major issue for the global wheat trade since last year as GASC has tightened the terms it applies following last year's controversy over the quality of cargoes of Russian wheat.

The French trade has been concerned about a new requirement to load 60,000-tonne shipments to Egypt at a single port -- effectively ruling out France's leading grains port of Rouen, which is too shallow to fully load such volumes.

But Nomani said last month that Egypt must treat all its wheat suppliers equally, and unify tender terms for all origins.

"There has been no (GASC) declaration saying 'I accept two ports or I refuse two ports'," the same source said, adding that Nomani was unable to make such a decision without the support of the GASC's executive committee.

"The decision is up to this committee which has sovereign authority on its decisions," he added.

However, some traders with good knowledge of the situation said they were less optimistic about GASC altering its rules than they were before the visit.

"The visit doesn't seem to have made things move. The Egyptians don't look like they want to budge on the one port. They pointed to the fact that they receive plenty of offers, notably from Russia."

GASC bought a total of around 780,000 tonnes of wheat in the past three tenders. Less than 10 percent was won by France, while 85 percent will be supplied by Russia, a preference notably explained by the one-port rule, more aggressive offers from Russia and an unfavourable euro-dollar exchange rate.

France is Europe's biggest wheat producer and exporter.

"It's hard to be confident that there will be a change in the (one-port) rules," said a second trader. "They (GASC) seem happy with the quality of Russian wheat and they have some reservations on the quality of French wheat."

Industry official have said that the French wheat sector needed to improve the quality of its grain if it wanted to attract more overseas buyers. (Writing by Marie Maitre, editing by Anthony Barker)

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