Japan Halts Some U.S. Wheat Imports on Gene-Altered Crops

Japan, Asia’s second-largest wheat buyer, suspended some imports of the grain from the U.S. after the discovery in an Oregon field of gene-altered crops developed by Monsanto Co. (MON) that never won approval for consumption.

Japan halted imports of western-white wheat and feed wheat from the U.S., and canceled a plan to buy 24,926 metric tons of western-white wheat in an import tender today, said Hiromi Iwahama, director for grain trade and operation at the Ministry of Agriculture, Forestry and Fisheries. The action is aimed at preventing unapproved crops from entering the food chain, he said today in a telephone interview.

Scientists said the rogue wheat was a strain tested from 1998 to 2005 by Monsanto, the world’s largest seedmaker, which withdrew its application for approval amid concern buyers would avoid crops from the U.S., the world’s biggest wheat exporter.

“We have suspended imports of wheat produced in Oregon and surrounding areas, as we cannot rule out the possibility that supplies containing unapproved crops may enter Japan,” Iwahama said. “We can resume purchases after U.S. authorities establish testing methods to identify the unapproved variety.”

Wheat on the Chicago Board of Trade fell, extending the biggest monthly loss since February. Futures for July delivery dropped as much as 0.9 percent to $6.9625 a bushel and were $7.0025 at 3:35 p.m. Tokyo time, extending this year’s losses to 10 percent.

The ministry controls overseas purchases and domestic sales of wheat to stabilize supply in Japan, which depends on imports for 60 percent of its food. Western-white wheat is used in Japan mainly to make cakes and cookies. About 90 percent of wheat produced in Oregon is said to be soft-white wheat, which Japan also bought for livestock feed, Iwahama said.

Bread, Noodles

Japan will continue importing hard-red winter wheat and dark-northern spring wheat from the U.S., as they are sourced from Montana, Washington, North Dakota and Minnesota states, he said. These types of wheat are used in Japan for bread and noodles.

“Japan is a key importer of wheat from multiple destinations, but they are renowned purchasers of U.S. wheat, Australian wheat and Canadian wheat,” said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia. (CBA) “Any disruption that occurs to U.S.-Japan trade flows, for whatever reason, has the potential to be supportive for Australian exporters.”

Japan has stockpiles of wheat equivalent to 2.3 months of consumption. The ministry expects imports from the U.S. to resume before the inventories are depleted, as the U.S. government is acting to contain the problem, Iwahama said.

Unapproved Seeds

The U.S. Department of Agriculture said yesterday it is investigating how the unapproved seeds slipped out and were growing nine years after St. Louis-based Monsanto ended its wheat program. The discovery may prompt foreign buyers uneasy with gene-altered crops to stop buying wheat from the U.S., according to critics including the Union of Concerned Scientists and the Center for Food Safety.

If Japan discovers supplies containing modified crops that have not been confirmed safe by the health ministry, it orders importers to ship them back to exporting countries, or dispose of them.

Japan imported 5.62 million tons of milling wheat last fiscal year, of which 3.26 million tons or 58 percent, was from the U.S. Canada was the second-largest supplier to Japan, with 1.32 million tons, while Australia was the third with 1.03 million.

Japan imported 867,000 tons of western-white wheat from the U.S. in the year ended March 31, data from the Agriculture Ministry showed.

To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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