U.S. rushes to ease foreign fears over modified wheat discovery

Major global importers expressed alarm over U.S. wheat supplies Thursday after the first-ever discovery of an unapproved strain of genetically modified grain in Oregon, as U.S. officials raced to contain the fallout.

Japan canceled a tender offer to buy U.S. western white wheat and the European Union said it would test incoming U.S. shipments and block any containing genetically modified wheat. U.S. wheat merchants did not report any cancellations of purchases Thursday, but some analysts feared a potentially damaging blow to the $8 billion export business.

“Unless there’s a quick resolution, this is not going to be good for the export market,” said Art Liming, grain futures specialist with Citigroup.

The U.S. Department of Agriculture said nine investigators were collecting evidence in and around Oregon, the West Coast state where the genetically modified, or GM, wheat was found growing. A USDA spokesman said the investigators are taking witness statements, records and samples.

“We have increased the number of investigators throughout this month to work quickly and carefully to cover as much ground each day to determine what we are dealing with, how it got there, and where it might have gone,” he said.

The USDA said the modified wheat found in Oregon posed no threat to human health, and also said there was no evidence that the grain had entered the commercial supply chain.

Modified crops tolerate certain pesticides, allowing farmers to improve weed control and increase yields. Many consumers are wary of such food, and few countries allow imports of such cereals for direct human consumption.

While most of the U.S. corn and soybean crops come from genetically modified plants, no modified wheat varieties are approved for general planting in the United States or elsewhere, the USDA said. The EU has asked Monsanto, the maker of the GM wheat, for a detection method to allow its controls to be carried out.

Scientists said the wheat found in Oregon was a strain field-tested from 1998 to 2005 and deemed safe before St. Louis-based Monsanto withdrew it from the regulatory process. Wednesday, Monsanto said there was considerable reason to believe that the presence of its product was very limited.

U.S. wheat futures on the Chicago Board of Trade dipped on Thursday. CBOT wheat for July delivery closed 4 cents per bushel lower at $6.98-3/4 per bushel.

Asian wheat importers South Korea, China and the Philippines said they were monitoring the situation. The world’s biggest wheat importer, Egypt, said it had no fears yet over supplies.

The wheat was discovered this spring in an Oregon field that grew winter wheat in 2012. USDA officials said that when a farmer sprayed the so-called volunteer plants with a powerful herbicide meant to kill off standard, unaltered wheat plants, some of them unexpectedly survived.

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