July 29, 2013 / 8:40 AM / 6 years ago

Japan may resume GMO-hit U.S. wheat buys this week -sources

TOKYO, July 29 (Reuters) - Japan could resume buying U.S. western white wheat as early as this week, industry sources said, after adopting stricter measures designed to detect genetically modified strains of the grain used for confectionary flour.

A restart of imports by Japan, the top customer of U.S. white wheat, will add to the already improving outlook for the grade, as it joins South Korea and other big buyers in resuming imports after discovery of a genetically altered strain in an Oregon wheat field in May led to a halt in shipments.

“(The import restart) could be as early as this week or next,” said an industry source who declined to be identified after attending a meeting held by Japan’s farm ministry last Friday for firms that handle western white.

Members of three other firms that had representatives at the meeting echoed the same view.

The ministry has said that imports could begin only after making sure that tests for the presence of genetically modified organisms (GMO) are conducted in both the United States and in Japan and that importers take out insurance to cover against future GMO discoveries.

A farm ministry official confirmed the meeting and said progress has been made towards restarting shipments. The official added, however, that there are still decisions that need to be made before imports resume.

A letter from the U.S. Department of Agriculture (USDA) certifying samples taken in the U.S. may be a requirement for imports, but that has yet to be set, industry sources said.

The farm ministry is reviewing a U.S. government update on how a GMO strain of wheat developed by Monsanto Co, but never put into commercial production, entered the system.

Reuters reported early In July that Japan hopes to restart white wheat purchases as soon as August.

Anticipation that Japan, which buys around 800,000 tonnes of western white annually, would resume buying grew after the USDA hosted a team from Japan’s farm ministry two weeks ago for talks aimed at restarting western white sales.

Recent meetings between a Japanese trade delegation and U.S. Pacific Northwest merchants in Portland, Oregon, and the release of western white - which had been purchased and shipped before the GMO wheat discovery - to Japanese millers, raised hopes that Japan will return to the market soon.

Japanese buyers are eager to arrange for white wheat shipments that arrive in October and November, when import demand peaks as millers work to make enough of the flour used to bake the white cakes Japanese traditionally eat at Christmas.

Last month, Japan offered to buy alternative wheat grades to western white for the first time in 53 years. Millers only took a small amount and were seen using the volumes for testing and to extend existing stockpiles, sources said.

Nisshin Seifun Group, Nippon Flour Mills and Showa Sangyo Co control about 70 percent of Japan’s flour market.

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