Few in Asia worried about US bio-corn - trade
Date: 30-Oct-00
Country: SINGAPORE
Author: Nao Nakanishi
Consumers in Asia are growing more conscious about the possible risks related to gene-spliced farm products, but only Japan, South Korea and Taiwan are moving towards obligatory labelling for genetically modified organisms (GMOs).
Traders said even buyers in South Korea and Taiwan had shown little reaction yet to the discovery in human food of Starlink corn, which is approved only for animal use in the United States.
"Nobody (outside Japan) is concerned about it," said a senior trader in Singapore.
On Wednesday, the Japanese government urged Washington to act swiftly to halt exports of foods containing Starlink.
For quality or political reasons, Japan and Taiwan traditionally buy US corn, while others in Asia have opted mostly for Chinese corn over the past several months due to more attractive prices, cargo sizes and shipping flexibility.
In countries such as Thailand, Malaysia and the Philippines there is little concern about GM products in general, and there is also concern that controls could push up prices.
JAPAN WATCHED
However, any action by Japan, the world's largest corn importer with an annual purchases of 16 million tonnes, might bring other buyers benefits in the short run, traders said.
If Japan spurned US corn, Chicago futures prices would fall and this would depress international physical prices, they said.
"The key is what the Japanese government is going to do," said a trader. "Could they allow Starlink in animal feed?"
Japan might even send back US corn cargoes possibly contaminated with Starlink corn, which then might be offered in the market with discount, another trader said.
But another said: "Japan can't afford to turn away from the United States...They'll resolve the issue pretty quickly. It won't have very long interruptions in product flows."
The United States accounts for 85-90 percent of global annual corn trade, totaling about 70 million tonnes.
China, Argentina and South Africa are also big exporters.
Traders said Japanese buyers have been covering needs for January to March next year when few alternatives to the US product are available, mainly due to seasonal factors.
The South American harvest does not kick in until March/April while the South African crop is not expected until July/August.
Traders said China might be the only option, though at present it is unclear whether Beijing will continue heavily-subsidised corn exports next year.
"If it's nearby, they might pick up a few cargoes from China. That would be interesting. But I don't see a big transfer of origins right now," a trader said.
Traders said major Japanese trading houses, which own silos and elevators in supplying countries, have been working on logistics to segregate genetically modified products from April next year, when the mandatory GMO labelling begins.