(Adds GASC confirmation of cancellation)
ABU DHABI/CAIRO, Sept 19 (Reuters) - Egypt failed to attract a single offer at its state grain tender on Monday, forcing it to cancel its third consecutive wheat purchase tender amid an ongoing standoff with suppliers over import policies.
The country's state grain buyer GASC was tapping global markets for wheat for the third time since Egypt reinstated a controversial zero-tolerance policy towards ergot on Aug 28.
GASC told Reuters it had been forced to cancel the tender after receiving no offers.
Ergot is a common grains fungus that can cause hallucinations when consumed in large amounts but is considered harmless in low quantities. depends on a steady stream of massive wheat shipments in order to run its sprawling bread subsidy programme, which feeds tens of millions of its citizens and may suffer if the zero ergot policy continues to block access to global grains.
"There is no change to the uncertainty and no one is prepared to offer," one European trader said.
A flurry of cargoes have been either rejected or held from export since Egypt reinstated the ergot ban last month and applied it retroactively to all outstanding contracts, infuriating traders who say their contracts should be honoured.
Eight shipments yet to arrive in Egypt were purchased under the 0.05 percent rule but are now being scrutinised under the stricter zero tolerance regulation.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Egypt's troublesome relationship with ergot