Saturday, Jun 13, 2009
(This item was originally published Friday.)
LONDON -(Dow Jones)- International inspection, verification, testing and certification company SGS said Friday it didn't inspect a wheat shipment under investigation by Egypt's General Prosecution office.
Egypt's Ministry of Trade and Industry Wednesday said investigators are investigating whether documents submitted for a shipment of Russian wheat into Egypt were forged.
The shipment was contracted for sale from RIAS Trading SA, the Swiss office of Rosinteragroservis, Russia's second-largest grain exporter, to Egyptian Traders Co., one of Egypt's largest wheat importers, which was supplying the wheat to the General Authority for Supply Commodities, Egypt's state buyer.
The Prosecution Office asked SGS to validate a document purporting to be an SGS certificate for the wheat on board the vessel Theoforos, the company said.
"SGS was able to provide to the Egyptian authorities with evidence that this document was grossly fabricated," the company said in a statement.
RIAS' commercial director, Chris Vanhonacker, said Friday the grain aboard the ship Theoforos was inspected by Control Union, a competitor to SGS, before departing Russia, "but that there are apparently false SGS certificates circulating in Egypt relating to this shipment."
Egyptian Traders Co.'s chief executive, Ashraf El Attal, said in an email to Dow Jones Newswires: "We did not appoint SGS and we can confirm that all documents are authentic and have been legalized by the Egyptian Embassy in Moscow."
At the weekend the Prosecution Office ordered Egyptian Traders Co. to pay back GASC $9.6 million - the value it had paid for the cargo - and for the wheat to be re-exported.
The Ministry of Trade and Industry confirmed Wednesday that a criminal investigation of Egyptian Traders Co. was being conducted.
However, Attal Friday denied any investigations are ongoing.
"The allegation that the prosecutor's office is investigating this shipment's documents is not true, since the prosecutor's decision issued last Sunday ordering that the cargo should be re-exported stated nothing more than that," Attal said in the email.
Egypt's Prosecution Office was unavailable for comment Friday.
Egypt is one of the world's largest wheat importers and GASC buys more than half of the country's total imports for the country's subsidized bread program.
More than half of the estimated 8 million tons of wheat a year Egypt imports is expected to come from Russia in the 2008-09 marketing year (July-June) due to Russian wheat prices undercutting other major exporters such as the U.S. and European Union.
However, the increased scrutiny of Russian wheat imports in recent weeks due to concerns over whether deliveries meet GASC specifications could damage Russia's share of Egypt's wheat supply.
Earlier this week Russia's agriculture ministry said it had agreed with Egypt that all Russian wheat sold to Egypt should only be accompanied by quality certificates issued by Russia's food quality watchdog, Rosselkhoznadzor, rather than independent surveyors, due to discrepancies on protein and moisture content.
GASC hasn't tendered for wheat on the international market since April and trade houses are speculating that its next purchase is unlikely to come from Russia. "GASC cannot postpone (tendering) for more than another two weeks and any purchase will likely be U.S. wheat because of the current investigation," said Vanhonacker. "Russia will export around 5 million tons of wheat to Egypt in 2008-09; to possibly lose Egypt as a destination is an absolute disaster for Russian wheat."
-By Sarah McFarlane, Dow Jones Newswires; +44 (0)20 7842 9327; sarah.mcfarlane@dowjones.com
Nour Malas in Dubai contributed to this story.
(END) Dow Jones Newswires
13-06-09 0801GMT
