February 28, 2008

Non-GM soy getting rarer in Asia as China clamps down on grain exports

Asian grain buyers may soon shed their inhibitions of GM soy as the premiums on non-GM crops grow to new heights.

Importers could see switching to non-GM crops as a way to deal with high grain prices currently- switching could provide savings of US$50 a tonne.

Premiums for non-GM corn from the US have more than trebled from US$10-US$15 a tonne a year ago while premiums for contracting farmers for growing conventional soy doubled to US$3 a bushel for the 2008 crop.

Countries like South Korea and Japan have generally shied away from GM crops due to food safety concerns.

However, South Korean food processors recently bought US GM corn for use in foodstuffs for the first time and analysts say chances are high that the Japanese could do the same. The manufacturers were forced to switch after nobody offered non-GMO corn for all its tenders in January.

Daesang Corp, one of four South Korean firms importing GM corn for food use for the first time in May said it would continue to do so.

The country aims to import a further 50,000 tonnes in May for food manufacturing.

One reason for the shortage is that China, the largest remaining producer of non-GM grains, is clamping down on exports to stave off inflation, leaving grain suppliers who have signed contracts scrambling to look for alternative sources of non-GM grains.

Exporters of organic food said there are shortages of non-GMO products in South Korea, Japan and Europe, countries which have had a low tolerance of GM crops.