(Adds trader comment, background, rejection of Canadian wheat)
Feb 16 (Reuters) - Bunge Ltd is seeking to resell a cargo of French milling wheat that was rejected by Egypt in December over trace levels of ergot fungus, traders said on Tuesday.
The tender to sell the wheat is set to close on Thursday, the traders said.
Officials from Bunge were not immediately available to comment.
Bunge launched legal proceedings earlier this month against Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), over the rejected cargo.
Bunge has said the wheat met the terms of a tender that allowed a maximum of 0.05 percent ergot at loading, a common global standard. But Egyptian authorities said the cargo exceeded the permitted level.
Bunge may be reselling the cargo to establish a value for any losses as part of its lawsuit, one European trader said.
Egypt is the world’s largest wheat importer, but it has sent mixed messages to exporters in recent weeks regarding its rules on ergot, starting with its rejection of the French cargo.
Egypt’s agricultural quarantine authority also rejected a shipment of Canadian wheat, saying it contained traces of ergot, a trade source said and official documents obtained by Reuters showed. (Reporting by Valerie Parent in Paris and Karl Plume in Chicago, writing by Julie Ingwersen in Chicago, editing by G Crosse)