June 4, 2013


South Korea stops US wheat imports over genetically modified concerns


Following the discovery of an unapproved strain of genetically modified (GM) wheat in the US, South Korean millers have suspended imports of US wheat; while some Asian countries have stepped up inspections, but stopped short of imposing import bans.


US officials are racing to quash global alarm in the wake of news the strain of wheat, developed by Monsanto Co., had been found in an Oregon field late last month. The discovery has already prompted major buyer Japan to cancel plans to buy US wheat while the EU said it would step up tests.


South Korea, which last year sourced roughly half of its total wheat imports of five million tonnes from the US, has also raised quarantine measures on US feed wheat, while Thailand put ports on alert.


The USDA said the GM wheat posed no threat to human health, and also said there was no evidence the grain had entered the commercial supply chain. Its scientists had conducted weeks of quiet field work and complex tests before the bombshell news was announced this week. To pin down the origin of the wheat, USDA extracted DNA from the tissue of wheat plants collected by its investigators from the Oregon field, and sent material to three facilities.


South Korean officials said the US had provided the DNA sequence of the rogue GM strain to help its inspectors detect if it was in other imported US wheat and flour. Test results will be released on Monday (Jun 3), the South Korean food ministry said.


"From this weekend, we will also collect wheat and flour imported from all over the US and will conduct tests next week," said Ahn Man-ho, a spokesman at the Ministry of Food and Drug Safety. South Koreans say they will not import US wheat until all tests are completed.


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 international supplier. However, Australia will have to deal with extra demand as its supplies tighten in the wake of unsustainably brisk exports and growing demand from domestic livestock farmers.


"The bulk of grain suppliers in Australia are cancelling shipping slots and selling grain to domestic feed mills and feedlots," said Stefan Meyer, a manager for cash markets at brokerage INTL FCStone in Sydney.


On Friday (May 24), US wheat fell for a second straight session on concerns about the prospects for American exports. Chicago Board of Trade July wheat dropped 0.47% to US$6.95-1/2 a bushel, having closed down 0.57% on Thursday (May 23).


Japan is not rushing to find alternative sources of wheat as the county's flour milling industry body revealed that the country have sufficient stocks for the short term.

An industry official in the Philippines, which buys about four million tonnes of wheat a year and relies mainly on US supplies, said the country could turn to Canada if it decides not to import from the US.
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