July 23, 2010

Japan has banned Toyota Tsusho Corp. from importing grains, such as wheat, for three months, after it sold US rice containing mould that was eventually consumed by humans.

The Ministry of Agriculture, Forestry and Fisheries said that the trading company imported the grain three years ago, which upon inspection was found to contain some mould. Toyota Tsusho was allowed to keep the rice for feed or industrial use, and sold it to a grain distributor. The rice was used for human consumption after it was again sold to a grain marketer.

Illegal sales of tainted foreign rice rocked Japan two years ago, leading to the resignation of then Agriculture Minister Seiichi Ota and his deputy. The government has since banned imports of contaminated grains, requiring trading companies to destroy or ship them back to exporting countries.

The company "had an obligation to confirm the imported rice was used as livestock feed in Japan. The ban is effective today, " Masachika Murai, director at the ministry's rice policy planning division, said.

Toyota Tsusho fell 1.3% to JPY1,259 (US$14.45) on the Tokyo Stock Exchange at 1:21 p.m.

The ministry will hold a regular tender today to buy 142,719 tonnes of US milling wheat. Japan has so far purchased 1.29 million tonnes of foreign milling wheat this fiscal year, which began on April 1. The government controls overseas purchases and domestic sales of wheat, rice and barley to ensure supply stability and protect local growers.

Toyota Tsusho, based in Nagoya city in central Japan, imported the US rice through a government tender designed for the nation to comply with trade agreements. Japan's quarantine office in Yokohama port, near Tokyo, found the cargo was contaminated with mould in June 2007.

Japan, self-sufficient in rice, is required to buy 770,000 tonnes of the grain annually under an accord with the World Trade Organization as the nation agreed to give minimum market access to exporting countries at the Uruguay Round of trade talks that ended in December 1993.