June 28, 2013 / 9:21 AM / 4 years ago

Japan eyes switch from western white wheat for 1st time in 53 yrs

TOKYO, June 28 (Reuters) - Japan is offering to buy wheat used for making cakes that is not the U.S. western white variety for the first time in at least 53 years, seeking to avoid a shortage of confectionary flour after a scare caused by genetically modified wheat found in Oregon.

U.S. western white is a grade developed particularly for the Japanese market and is a mixture of soft white and club white both grown in the country’s Pacific Northwest. Japan imports around 800,000 tonnes of the grade annually.

The world’s sixth-biggest wheat importer will allow Australian premium white wheat, Canadian western-red winter wheat, soft-red winter grain and club wheat from the United States, to be bought during a special dealing period that closes on July 5, Toru Hisazome, a farm ministry official in charge of wheat trading said.

As much as 2,000 tonnes can be purchased during the period, Hisazome added.

Shipments of the western white grade have been stopped since last month and are not expected to restart until the conclusion of an U.S. investigation into how a GMO strain of wheat developed by Monsanto Co, but never put into commercial production, was discovered growing in April.

Japan has relied on western white to make cakes and other confectionary since at least 1960 and the country’s farm minister earlier this month sought to reassure picky consumers about possible shortfalls of the flour.

“We believe western white is the best for making cake and other sweets,” Masaaki Kadota, executive director at the Flour Millers Association of Japan, said, adding that it was the ministry which made these selections.

Japan is likely to ultimately resume western white wheat imports as mills will find it difficult substitute origins, traders said.

“We don’t expect the ban to last too long,” said one Singapore-based grains trader. “They will resume U.S. wheat imports as mills in Japan are used to handling western white wheat, it is not easy to switch.”

SHRINKING STOCKPILE

Western white is the only grade used in cakes and for batter for the deep fried dish tempura.

Japanese millers hold a stockpile of 2.3 months worth of supply and 150,000 tonnes of western white was held at the end of May, Hisazome said. He estimated between 90,000 and 100,000 tonnes of the grade was still left.

A further 70,000 tonnes loaded onto ships before the GMO discovery was announced on May 29 is still in transit and will be checked once a test for GMO contamination has been established in Japan, he said.

An official at Japanese miller Nisshin Seifun Group declined to comment on its western wheat stocks, while spokesmen at Nippon Floor Mills and Showa Sangyo Co were unable to immediately confirm inventories.

The three Japanese millers control about 70 percent of the country’s flour market.

Last week, Monsanto officials said that continued testing of U.S. soft white wheat supplies showed that the presence of the company’s genetically altered wheat found in the Oregon field were highly suspicious and an isolated incident that could not have happened through normal farming practices.

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