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3-Food: Japan importer shifts from US corn to avoid Bt-10

-------------------------------- GENET-news -------------------------------

TITLE:  Japan importer shifts from US corn to avoid Bt-10
SOURCE: Reuters, by Aya Takada
DATE:   7 Jul 2005

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Japan importer shifts from US corn to avoid Bt-10

TOKYO, July 7 (Reuters) - A Japanese company has bought South African
corn as an alternative to U.S. supply to avoid the risk of receiving
cargoes tainted with Bt-10 corn, and others may follow suit unless the
issue is resolved soon, traders said.

The company bought about 100,000 tonnes of South African corn for
shipment in the third quarter of this year for delivery to Japanese feed
or starch makers, they said.

It was the first import deal for South African corn since February 2004,
when Japan imported 5,743 tonnes.

The rare purchase comes as Japanese corn importers are growing
increasingly concerned about sustaining huge losses from buying U.S. corn
cargoes containing Bt-10, an unapproved strain of genetically modified
(GMO) corn.

In recent weeks, four Japanese corn importers have already been ordered
by the government to destroy or ship back corn cargoes from the United
States after the shipments tested positive for traces of the illegal strain.

Bt-10 is a corn strain that is modified to produce a toxin that kills
pests. It is made by Swiss agrochemicals group Syngenta AG but has not
been approved for distribution.

Syngenta said in March some of its corn seeds in the United States were
mistakenly tainted with Bt-10 from 2001 to 2004.

Japan has a zero-tolerance policy on imports of unapproved GMOs. The
Agriculture Ministry has proposed accepting feed grain cargoes with up to
1 percent of Bt-10, to smooth the flow of U.S. corn supplies to Japan.
But the plan is subject to approval by Japan's Food Safety Commission, an
independent agency.

"The Japanese importer has bought South African corn as a substitute for
U.S. supplies because the issue of Bt-10 contamination remains
unresolved," one Japanese trader said.

Currently, South African corn is more expensive than U.S. corn, which is
offered to Japanese buyers at a premium of less than $1.80 a bushel, cost
and freight, over Chicago Board of Trade corn futures.

"But when considering costs for shipping back tainted U.S. cargoes, some
importers may see South African corn as affordable," the trader said.


Traders said South Africa is best positioned to meet demand from Japanese
buyers who seek alternative supply sources, as it expects its largest
corn harvest in more than a decade and could export several million tonnes.

Japanese interest in corn from China, a major corn supplier in the Asian
market, remains low due to quality and delivery problems, while high
shipping rates have discouraged Japanese firms to buy corn from distant
areas such as South America.

Japan is the world's biggest corn importer with annual demand of about 16
million tonnes, and it normally sources more than 90 percent of its
requirements from the United States, the top exporter.

Japan's Agriculture Ministry has so far discovered four U.S. feed corn
cargoes tainted with Bt-10 since it started random tests on arriving U.S.
shipments on May 23.

More contaminated cargoes will likely be found, as the ministry has
stepped up its tests to cover all U.S. corn cargoes.

To ensure tainted supplies are not shipped to Japan, the ministry has
told importers of U.S. corn they must obtain certificates stating cargoes
do not contain Bt-10. But so far the ministry has obtained only eight

Some U.S. grain exporters have started testing their corn shipments to
Japan, in response to requests from Japanese importers. But others are
reluctant to do so because of high costs and extra work to arrange tests,
traders said.


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