Scrutiny of U.S. wheat shipments to Asia increased as Taiwan said it was investigating the impact on its supplies of an unapproved and genetically modified strain found growing in an Oregon field.
The Taiwan Flour Mills Association won’t accept wheat from Oregon and has asked suppliers for assurances that future shipments are free of gene-altered wheat, according to an e-mail from the group. The Council of Agriculture and Department of Health are also conducting investigations, Vincent Lin, an official at the farm agency, said by phone from Taipei today.
Japan has suspended imports of western-white wheat and feed wheat from the U.S. following the discovery of the grain developed by Monsanto Co. (MON) while in South Korea the government increased inspections and flour millers said they would halt purchases until an investigation was complete. The threat to shipments to Asia come as the U.S. Department of Agriculture forecasts record global production, boosted by a 48 percent increase in Russian output and a 40 percent gain from Ukraine.
“To allay consumer concerns, Asian buyers may opt to import from other suppliers such as Canada, Australia or Europe, giving those them a short-term boost,” Gao Yanbin, a Shanghai-based director of research at Jinshi Futures Co., said by phone today.
Wheat advanced for a second day on the Chicago Board of Trade as wet weather raised the risk of damage to the U.S. winter crop. It was at $7.11 a bushel at 5:59 p.m. Taipei time.
Five of the top 10 buyers of U.S. wheat are in Asia, led by Japan, Michael Spier, vice-president of U.S. Wheat Associates, said at a conference in Bali last month.
Japan, China, Taiwan, South Korea and the other Asian importers accounted for almost 38 percent of the wheat sold by the U.S. as of May 23 for delivery in the year ended May 31, according to the USDA.
The U.S. is the dominant global supplier, so ultimately buyers will accept that it is capable of sorting out the issue and living up to its assurances, Gao said.
Taiwan buys high-quality wheat mainly from Montana, winter wheat chiefly from Kansas and soft-white wheat predominantly from Idaho, the mills association said. It doesn’t buy the grain from Oregon and will continue to purchase U.S. wheat if it can be shown it’s not from that state and is free of genetic modification, according to the e-mail.
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