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TIMELINE-Egypt's on again, off again relationship with ergot

ABU DHABI/CAIRO, Sept 19 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 programme, 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 cancelled 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. (Reporting by Maha El Dahan and Eric Knecht; Editing by Dale Hudson)

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