7-Business: US 2000/01 corn exports dented by StarLink

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TITLE:  US 2000/01 corn exports dented by StarLink
SOURCE: Reuters, by K.T. Arasu 
DATE:   September 10, 2001

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US 2000/01 corn exports dented by StarLink

CHICAGO - U.S. corn exports in the just-concluded 2000/01 season beat 
revised targets, but were well off the original mark as unapproved StarLink 
corn drove some buyers to alternate markets, industry sources said last 
week. Gene-altered StarLink corn slipped into the U.S. food chain nearly a 
year ago, just weeks into the 2000/01 marketing year, sparking recalls of 
food items such as taco shells. The United States does not allow the corn 
for human consumption, but only for animal feed. Corn export sales until 
Aug. 30 of the 2000/01 marketing year, which ended Aug. 31, totaled 1.97 
billion bushels, the U.S. Agriculture Department said last week. Sales made 
on Aug. 31 will be reflected in the USDA's report this week. The Aug. 30 
tally beat the USDA's August estimate of 1.875 billion bushels, but fell 
short of its initial target of 2.275 billion. It was above the 1.937 
billion sold in 1999/2000.

The USDA data showed that imports by Japan, the single largest buyer of 
U.S. corn, in the 2000/01 season dipped 6.0 percent to 15.5 million tonnes 
from the previous year. Imports by South Korea rose by 110,100 tonnes to 
3.32 million tonnes. Japan does not allow StarLink corn for either food or 
feed production, while South Korea allows the gene-modified variety only as 
animal feed.

Analysts and exporters said they were expecting the impact of StarLink corn 
on exports to be less severe in the 2001/02 marketing season, because the 
variety was not grown this year, although some StarLink corn could still be 
in storage bins. They said the challenge in the marketing of U.S. corn this 
year could come from China, which is attempting to make inroads in Taiwan, 
which buys most of its corn from the United States. "Taiwan is one of the 
last markets that's solely a U.S. market in the Asian region," said grain 
analyst Shawn McCambridge of Prudential Securities. "It doesn't mean Taiwan 
will turn their entire export program to China," he said. "We'll still keep 
a dominant position in the Taiwanese market."

There are expectations Taiwan would begin buying Chinese corn from early 
next year in anticipation of its lifting of a decades-old ban on importing 
grain from China once Beijing joins the World Trade Organization, expected 
in early 2002. McCambridge said the decline in Japan's import of U.S. corn 
in 2000/01 showed "what happens when we have an issue like StarLink to deal 
with." He did not, however, expect any serious impact on U.S. corn sales in 
the 2001/02 marketing season from StarLink. "The EPA has stated that most, 
if not all, StarLink corn has been removed from U.S. supplies. It's not a 
real issue," he said. He said South Korea's large purchase of South 
American corn indicated some lingering concern over StarLink corn.

Last week, Argentina said it had sold 950,000 tonnes of corn to South Korea 
as of Aug. 24 in the 2000/01 season, compared with 60,000 tonnes in the 
same 1999/2000 period. Analyst Dan Cekander of Fimat Futures said export 
sales to Japan could recover if it allows imports of animal feed to contain 
up to 1 percent of unapproved genetically modified organisms (GMOs). "If 
that is official, they can bring it in for food and if it doesn't pass the 
test, they can just slip it into feed use." Japanese officials said last 
month steps would be taken to approve a tolerance level following 
recommendations from an advisory panel, but did not know when it would take 
effect.



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