June 19, 2010

Japan is planning to loosen its grip on food wheat imports from the US, Australia and Canada by giving trading houses flexibility in handling logistics for bulk imports, starting the September loading.

The move, initially aimed at cutting administrative costs, is likely to result in lower sale prices to flour millers and thus benefit consumers, said Shirara Shiokawa, director of the grain trade division at the Ministry of Agriculture, Forestry and Fisheries.

"We'll enable trading houses to make the best ship arrangements by abolishing unnecessary regulations," Shiokawa said on Friday (June 18), adding that ships would be able to carry some other farm products together with milling wheat.

The deregulation may benefit trading companies that have the know-how to manage large-sized carriers and those who deal with several grains and farm products, but may leave smaller trading firms behind, traders said.

Currently when the ministry buys five major types of wheat from the three countries via a weekly tender with trading houses, it orders the type of wheat, loading period and ship size. The ministry's regional offices later inform traders of the destination port for shipments.

"Japan is also considering importing milling wheat from Ukraine, Kazakhstan, Russia, Argentina and Germany in a bid to diversify its sources of wheat. Diversifying origins is what we've learned from a jump in wheat prices two years ago. We should get prepared for if and when we have to buy from other countries," Shiokawa said.