CAIRO, Aug 31 (Reuters) - Egypt, the world's largest wheat buyer, will allow wheat shipments with a moisture level of up to 13.5 percent for an extra nine months, the trade ministry said on Thursday, extending a higher limit that was set to expire.

The higher moisture limit applies to all origins but has in the past favoured French wheat as it can struggle to meet the 13 percent ceiling.

Egypt's state-buyer GASC raised the moisture limit to 13.5 percent from 13 percent in February for nine months.

The trade ministry said the higher moisture limit, which Egypt has applied on and off in recent years, is intended to promote competition among different origins at its state tenders.

Egypt over the past year has sourced most of its supplies from the Black Sea production zone, with Russian imports in particular dominating in recent months.

However, the higher moisture tolerance is likely to do little to help French wheat compete with Russia this season, a Europe-based trader said.

"Moisture is not really a problem for French wheat this season. All is a question of prices. And right now French wheat is not able to compete with that from Russia," the trader said.

At a tender this week in which GASC purchased 295,000 tonnes of wheat, it bought 235,000 tonnes from Russia, with an additional 60,000 tonnes from Ukraine.

Excessive moisture levels in wheat can erode quality and heighten the risk of mould and insect damage.

The new nine-month period is effective from Oct. 3, a ministry statement said.

(Reporting by Eric Knecht; Additional reporting by Valerie Parent in Paris; Editing by Keith Weir and Susan Thomas) ((eric.knecht@thomsonreuters.com; +20 2 2394 8102; Reuters Messaging: eric.knecht.thomsonreuters.com@reuters.net))