A wheat cargo arrives at Alexandria. The destination lab reports DON above the threshold. The importer refuses delivery. The load-port certificate, attached to the documents, says the cargo was in spec. Who absorbs the loss is not an agronomy question - it is a contract question.
Mycotoxins are secondary metabolites of mould fungi, most commonly Fusarium, Aspergillus and Penicillium. In grain, the recurring names are deoxynivalenol (DON, also called vomitoxin), aflatoxin B1, ochratoxin A, zearalenone and the fumonisins. Some develop in the field (Fusarium under wet harvest conditions); others grow in storage (Aspergillus where warehouses run warm and damp).
For a trader, this is not a fungal problem. It is a contract risk: a cargo that left the load port as ordinary grain can become a rejection candidate at the discharge port.
Each importing market has its own thresholds. EU Regulation 1881/2006 sets maximum levels for DON, ochratoxin A, aflatoxins and zearalenone. The FDA in the United States issues advisory levels - not mandatory, but applied as the practical benchmark. State buyers - Egypt's GASC, Turkey's TMO, the Iranian importers - publish their own tender specifications, often stricter than the European baselines.
A grain contract can specify the limit directly ("DON max 1.25 ppm, food grade") or by reference to a national standard. Without an explicit clause, a dispute defaults to whichever statutory regime applies at the place of performance, or to general mercantile reasonableness - rarely the seller's friend.
GAFTA 124 is the standard procedure for sampling and analysis. It defines where the sample is taken (load or discharge), how the composite is built, which laboratories are accredited, and which methods of analysis are acceptable.
The trap is procedural. A correct analytical result obtained outside the GAFTA 124 protocol often loses weight in arbitration. If the seller's load-port sample was not drawn under the protocol, his "clean" certificate is fragile. If the buyer's destination lab was not accredited, his "dirty" result is equally fragile. Both parties can end up arguing about technique rather than the cargo.
The certificate of sampling and analysis shall be final and binding...
Most GAFTA contracts contain a final-at-loading provision: the surveyor's certificate at the load port is final and binding as to quality. Where the cargo passed at loading, a different reading at discharge does not automatically reopen the quality question.
Exceptions are narrow. Toepfer v Continental Grain (1974) showed that even an acknowledged surveyor's error does not normally break a final certificate. The recognised exceptions are manifest error on the face of the certificate, the surveyor acting outside his mandate, and fraud. A simple second analysis showing different numbers at Alexandria is not, on its own, one of them.
First, the seller cuts corners on sampling. The load-port sample is drawn informally, by a local rather than an accredited laboratory, outside the GAFTA 124 protocol. The result is technically "in spec" but procedurally indefensible. The destination result then becomes the only credible number.
Second, the buyer rejects without procedure. The rejection notice is informal, no independent resampling is offered, deadlines slip. A buyer with a real quality complaint can convert himself into the party in breach by handling the rejection badly.
Third, the contract is silent on destination requirements. EU limits, GASC tender specifications, and Iranian buyer requirements are not the same. Without an explicit clause assigning the standard, the tribunal is left to interpret what the parties "must have meant" - the most expensive thing a contract can ask a tribunal to do.
The mycotoxin family is wider than DON or aflatoxin. Ergot - the sclerotia of Claviceps fungi - produces ergot alkaloids and is regulated under the same EU framework. The Egypt ergot saga of 2016 shows the dispute mechanics in full.
In late 2015, Egypt's Quarantine Authority began applying a zero-tolerance policy on ergot, based on a 2001 rule. International standards permit up to 0.05 percent. The new line was applied to shipments already contracted under the old rule.
Through 2016, GASC rejected cargoes from Russia, France, the United States and Romania - tens of thousands of tonnes returned or redirected. Traders boycotted three consecutive GASC tenders. Force majeure claims and contract repudiations followed. In late 2016, after the supply pipeline visibly broke, Egypt reverted to the 0.05 percent international standard.
The legal point is not the agronomy. It is that destination requirements changed mid-contract, and the contracts did not say what happened in that case. Sellers had a paid load-port certificate showing compliance with the standard at the time of contract. Buyers had a new domestic rule. The contracts were silent on which one prevailed - and the cargoes sat outside Egyptian ports while the parties argued.
Mycotoxins are a technical problem, but the loss travels through the contract. A specific limit in the specification, sampling under GAFTA 124 at the load port, an accredited laboratory, and an explicit clause on destination standards: four lines of drafting that prevent months of arbitration and hundreds of thousands of dollars in disputed value.