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. Last Updated: 07/27/2016

Black Sea Wheat Exports Hampered by Bug Damage

PARIS — This year's wheat crop in Black Sea producers is showing a higher amount of bug damage, making it harder for exports from the region to meet the requirements of major buyers like Egypt, inspection group SGS said.

With European and North American wheat comfortably meeting bug damage stipulations, the issue could curb Russian and Ukrainian shipments as leading importers apply stricter limits, an SGS executive said on Tuesday.

Bug damage is one of the key quality criteria used by wheat buyers to ensure that grain meets local milling standards.

The world's leading wheat importer, Egypt, has notably cut the limit it applies to a maximum of 1 percent, from 2 percent, since last year as part of an ongoing shakeup of its tender terms.

"This year we see it will be very hard .... to find correct [Black Sea] wheat for destination markets like Egypt and also Jordan," said Johny Boerjan, vice president of global technical governance at SGS Agricultural Services, part of the SGS group.

"We see Egypt buying nowadays from France," he said on the sidelines of the Global Grain 2009 conference. "Last year everything came from the Black Sea."

Russian wheat dominated exports to Egypt last season, claiming some 4 million metric tons out of 5 million metric tons imported by Egyptian state buyer GASC in the year to June 30.

However, Egyptian purchases of this origin have slowed sharply since May in the light of a dispute over the quality of Russian grain imported by a local trading company.

Egypt has continued to buy some Russian wheat in the early part of the 2009 to 2010 season but its stricter bug damage policy has pushed up the price of Russian wheat meeting this condition.

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

On the basis of crop samples taken by SGS during the harvest season, average bug damage in this year's Russian wheat crop was estimated at 2.6 percent while in Ukraine it was 4.6 percent.

"There are regions [in Ukraine] that are okay but I've seen regions with 80 percent bug damage," Boerjan said.

Bugs damage the milling quality of wheat by destroying the gluten content, the absence of which stops bread from rising correctly during baking, he said.

The significant level of bug damage in Black Sea countries was linked both to climatic conditions and a lack of appropriate pesticide use, he added.