July 9, 2013

 

South Korea to resume imports of US white wheat

 

 

South Korean millers will lift a suspension on US white wheat imports next week as no genetically modified grain were found during tests on such shipments.

 

South Korea and Japan, Asia's leading wheat importer, suspended imports of US white wheat in May after an unapproved genetically modified strain was found in an Oregon field. Chicago wheat prices have taken a hit as Asian importers remain reluctant to buy US white wheat even as the US government has said the discovery of the rogue strand appeared to be an isolated incident. Roughly 85% of all the soft white wheat grown in the Pacific Northwest heads to Asia, with Japan as the biggest customer, according to US Wheat Associates, an industry group.

 

"We are thinking of resuming US white wheat imports anytime next week," a South Korean industry source said.

 

Another industry source said the decision to resume imports was triggered by positive results from the latest government test on US wheat.

 

South Korea's food ministry said that it tested 160 cases of wheat and flour covering all US shipments and found no genetically modified wheat. Initial tests, which had looked at wheat from the state of Oregon, US, also found no genetically engineered wheat. South Korea last year sourced roughly half of its total wheat imports of five million tonnes from the US.

 

Meanwhile, Japan's farm minister said that the ministry intends to set up its own inspection procedures and seeks details of the US tests.

 

On July 4, an official at the ministry said Japan's position was unchanged from that outlined on July 9. The official said Japan also needed to determine how to get adequate coverage for future imports from the US.

 

Insurance normally takes into account pesticides among others, but the coverage should now include the presence of genetically modified organism (GMO) if and when Japan resumes importing US soft white wheat, he said.

 

Last week, Japan said it was offering to buy wheat used for making cakes that is not US western white variety for the first time in at least 53 years. Asia imports more than 40 million tonnes of wheat annually, almost a third of the global trade of 140-150 million tonnes. The bulk of the region's supplies come from the US, the world's biggest exporter, and Australia, the number two supplier.

 

US wheat futures rose over 1% on July 3, posting their best advance in two weeks on reports that China bought large quantities of US and Australian wheat, and also helped by a bargain buying spree after eight consecutive daily losses drove the market to a one-year low earlier in the week. Although the US has embraced genetically modified crops such as soy and cotton, genetically modified wheat has never been approved there, or anywhere else in the world.

 

The USDA has said it is working to make "appropriate and validated" tests available to detect the GM wheat.