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TITLE:  GM wheat seen getting mixed reception in Asia trade
SOURCE: Reuters, by Michael Byrnes
DATE:   June 17, 2003

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GM wheat seen getting mixed reception in Asia trade

SYDNEY - The world's first commercially produced biotech wheat, looming in
North America, is likely to by-pass some big Asian import markets but could
create a battleground in others, producers and traders said yesterday.

Genetically modified (GM) wheat, one of the biggest and most complex
bioengineering plays, could be just a year away with life sciences giant Monsanto Co
(MON.N) well advanced in seeking regulatory approval in the United States
and Canada.

However, Monsanto told Reuters yesterday it would not launch the product in
Australia, the world's second-largest wheat exporter after the United States.
Australian wheat leads in most Asian markets, against fierce U.S.

Asian markets also showed deep splits between developed nations such as
Japan, which will shun GM wheat, and developing markets such as Indonesia, which
will buy on price.

"Our focus for biotech wheat development is the North American market,"
Monsanto Australia spokesman Mark Buckingham told Reuters. "We don't have any
plans to grow it in Australia."

A spokesman for Australia's monopoly wheat exporter AWB Ltd (AWB.AX) also
told Reuters that the first commercial GM wheat crop in Australia was at least
seven years away.

"Overwhelmingly our customers have indicated they want a product that is
GM-free," AWB spokesman Peter McBride said.


Australia exports 16 million tonnes of wheat in a normal year, with
Indonesia, Japan and Korea among its main markets.

Japanese millers would not import GM wheat, the Japan Food Agency said. The
United States supplies about half of the six million tonnes of wheat a year
imported by Japan, with Canada and Australia supplying the rest.

In contrast, Indonesia's biggest flour mill, Bogasari Flour Mills, which
buys more than half of its three million tonnes of imported wheat a year from
Australia, said of GM wheat: "Why not?"

"In developing countries...the cost-benefit equation for GM products (should
remain) favourable (to) offset any kind of opposition," Bogasari senior
vice-president Philip Purnama said.

A trading manager with a global grain trader said developed Asian countries
might reject GM wheat, but developing markets would buy on price.

"Most Asian countries will be mainly looking at the cheapest price. Origin
is not going to be that big an issue," he said.

Monsanto's biotech wheat will produce yield gains, resist herbicides and
also minimise weed seed with the grain.

AWB's McBride would not comment on whether Australia might be out-gunned by
productivity gains in the United States and Canada.

Monsanto would apply to food regulator Food Standards Australia New Zealand
for the right to import foods which contain the GM wheat, Buckingham said.

(Additional reporting by Sambit Mohanty in Singapore and Jae Hur in Tokyo.).



 Hartmut Meyer       
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