Japan and South Korea Blocked Up “Upgraded” US Wheat

“One drop of poison infects the whole tun of wine”-

English proverb

In the summer of 2013 South Korea and Japan suspended the import from U.S. trading partners because the fact of presence of GMO products in wheat was revealed. White wheat in the amount of 25000 tonnes was imported from Oregon. The annual amount of import of that type of wheat is 800000 tonnes per year that would be imported from other countries in case the test shows that there were GM products in new shipments or investigation shows nothing and whole situation remained unclear. This amount of import equals 16% of the total import of wheat per year or 26.7% of total import from the US. In addition, 80% of US wheat is imported by EU.

As a matter of fact, the wheat from that farm is the same as from the farms from other 16 states which did not use GMO additions from genetically point of view. Moreover, the Department of Agriculture stated that no GMOs products were found in the following grain shipments.

As the U.S. Department of Agriculture stated, their tests showed that presence of GM products is “unexpected” and “very limited”.

To begin with, GMOs, or “genetically modified organisms”, were initially created in 1972 by Paul Berg. The examples of GMOs are plant, animals and other organisms that were created using biotechnology through merging DNA from different species to add specific features of chosen species to the target organism. Since that time technology was upgraded and renovated. The variety of modernized products has increased significantly; for instance, initially these products were used in medicine, later this technology was implemented into agricultural industry, increasing the resistance of crops to bugs, temperature, diseases etc. However, the production of GMO products is prohibited in particular countries because the scientists of those countries revealed that consequences of consumption of these products can be harmful for people. Nevertheless, the import of GMO products is not restricted.

According to the regulatory arrangements of Japan, Republic of Korea and EU-27 the possible proportion of accidental presence of GM products is 5%, 3% and 0.9% respectively. The news from Japan and South Korea triggered the action taken by EU-27 to check all imported crops from U.S. trade partners thoroughly. EU commission stated that all incoming shipments will be tested, and in case of detecting, all incoming shipments will be banned.

From historical chart of wheat price can be derived that this act resulted in one of the main factors affecting world wheat price in 2013. After the investigation was finished, in July of 2014 Japan announced that ban for U.S. wheat was lifted and purchases were resumed. This announcement heated up the futures prices of wheat highlighting that concerns about food policy in Japan are resolved. (pic.1.)

Pic.1. Wheat Historical Futures Price Chart in 2013

1

Source: tradingcharts.com

To crown it all, firstly, the fact that there is case of adding GM products in spite of the scale of this case can trigger the action around the world, this is the effect of the big country, secondly, this case can negatively affect the welfare of the consumers in countries which import the wheat in the following way: lack of supply of wheat in short-term could lead to increased consumption loss in case of giving up trade or making deals on spot prices that are likely to be higher due to “artificially” decreased supply. In addition, there were no hard evidences that crops with GMO additions are not harmful for people. The scientists claimed that there were no long run tests on human species, thus, nobody is ready to place bets that consumption of  GM crops and other products will not affect in dramatic way the human kind, since the test on other mammals revealed several crucial negative side effects after consuming GM products.

Sources:

  1. http://www.youtube.com/watch?v=8ixjPNR6qBQ&feature=player_embedded
  2. http://www.nytimes.com/2013/06/01/business/global/japan-and-south-korea-bar-us-wheat-imports.html?ref=internationaltradeandworldmarket&_r=0
  3. http://www.gmwatch.org/index.php/news/archive/2013/14901-wheat-drops-as-japan-suspends-u-s-imports-on-modified-crops
  4. http://www.businessinsider.com/japan-blocks-huge-us-wheat-import-2013-5
  5. http://futures.tradingcharts.com/hist_CW.html
  6. http://www.daff.gov.au/agriculture-food/biotechnology/reports/maintaining_product_integrity_in_the_australian_seed_and_grain_supply_chain/appendixes/appendix_a

 

 

 

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