Japan to delay tenders to buy rice, wheat, barley
22-SEP-2008 Intellasia | Bloomberg
Sep 22, 2008 - 7:00:00 AM
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Japan, Asia's biggest wheat importer, deferred tenders to buy rice, wheat and barley until measures are taken to shield consumers from tainted products as the farm minister resigned over sales of contaminated foreign rice.
Grain contaminated with mold or pesticide will be destroyed or shipped back to the country of origin, Masaaki Okuhara, director general at the staple food department of the Ministry of Agriculture, Forestry and Fisheries, said today in an interview. No date has been set for tenders to resume.
The country has been hit by a scandal over sales of tainted imported rice to domestic food companies and restaurants. The ministry, which sold the grain on condition it must be used for industrial products such as glue, discovered this month that some rice was sold for human consumption by distributors.
"The measures the ministry wants to take may hinder flows of grain from overseas to Japan,'' Nobuyuki Chino, president of Tokyo-based Unipac Grain Ltd, said today by phone. "If tainted grains have to be shipped back to origin, nobody will want to sell as exporters don't want to take such a risk,'' he said.
Agriculture minister Seiichi Ota and his deputy Toshiro Shirasu left their posts, the farm ministry said today.
"I have decided to step down to make it clear that the ministry as a whole is responsible for the incident,'' Ota told reporters in Tokyo today. Tainted rice was imported from China, Vietnam and the US, according to the ministry.
The ministry controls imports and domestic sales of rice, wheat and barley.
Tender Canceled
A tender to buy 55,000 metric tonnes of US milling wheat was cancelled yesterday because of protests over contaminated rice. That move followed the scrapping of an import tender September 17 for 25,000 tonnes of rice.
"Our system for grain imports is now under question,'' Youichirou Tomiyoshi at the ministry's grain trade division, said yesterday in an interview. Still, "we have received no reports of contaminated wheat and barley being sold in Japan for human consumption.''
Japan holds a tender almost every week to buy milling wheat from the US, Canada or Australia. The ministry may not be in a rush to import wheat after covering requirements up to November, said Derek Sliworsky, general manager at the Tokyo office of the Canadian Wheat Board, by phone yesterday.
CWB, the world's largest wheat seller, exports the grain to Japan through the ministry's tenders.
US Wheat
"We hope the ministry will resume tenders as soon as possible,'' Charlie Utsunomiya, director at the Tokyo office of the US Wheat Associates, said today by phone.
Japan has bought 2.2 million tonnes of milling wheat through regular tenders in the fiscal year started April 1. Imports were 5.13 million tonnes in the previous year.
Japan, self-sufficient in rice, is required to buy 770,000 tonnes of the grain annually under an accord with the World Trade Organisation as the nation agreed to give minimum market access to exporting countries at the Uruguay Round of trade talks that ended in December 1993.
The country bought 13,000 metric tonnes of rice from the US and 15,000 tonnes from Thailand at an average 102,000 yen (US$977) a tonne on September 5, the first purchase in six months after prices plunged from a record.
Chookiat Ophaswongse, president of Thai Rice Exporters Association, said Vietnam was not invited to the tender.
"As far as I know, rice from Vietnam doesn't pass chemical residue tests,'' he said. "The country boosted rice production so heavily that pesticide was used more than usual.''
Wheat for December delivery in Chicago gained 1.7% to US$7.035 a bushel at 5:11 p.m. Tokyo time after tumbling 4.6% yesterday. Rice for November delivery gained 2.1% to US$19.30 per 100 pounds.
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