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US Corn Sales to Korea Fall 55%
and Japan 6% over GE Issue

US Corn Sales to Korea Have Fallen 55% and Japan 6% over
GE Issue in Past Year

USA: May 3, 2002
Reuters

CHICAGO - U.S. corn is shedding the stigma of StarLink, the unapproved
transgenic variety that slipped into the food chain in late 2000, but grain
companies are not letting their guard down just yet against the rogue crop.

The discovery of StarLink corn in taco shells sparked a nationwide food
recall, hampered exports to Japan and South Korea and spawned class-action
lawsuits from farmers as corn prices fell.

In the United States, StarLink was approved for animal feed but not for
human consumption because of concerns over possible allergic reaction.

On Tuesday, however, the Korea Corn Processing Industry Association bought
corn supplies from the United States for human consumption for the first
time since the StarLink issue arose in September 2000.

The condition was that the cargo of non-genetically modified corn should be
accompanied by documents showing it had been tested for StarLink corn, which
was spliced with a gene to make it deadly to insect pests that cost millions
of dollars in crop damage each year in the United States.

"This sale does have some bells and whistles attached, as far as it's
non-GMO and the testing requirements in the contract, but it does show there
is an easing of the concerns," analyst Shawn McCambridge of Prudential
Securities said.

He also said the StarLink scare had led to policy changes, with the U.S.
government saying it would no longer approve crops for only food or feed
use, as it did with StarLink.

"It's a learning process when you come out with a new item like this
(StarLink). I don't foresee any genetically modified grain coming out on the
world market or in the U.S. market that is not approved for both food and
feed use," he added.

Larry Cunningham, spokesman for Archer Daniels Midland Co. , said the
agribusiness giant was continuing to test grains flowing through its
facilities for StarLink.

"We will continue (to test) for a while until we are 100 percent sure
there's no evidence of it," he told Reuters, adding that ADM had no firm
date to end testing.

Cunningham said it had been a "long period of time" since the company's
testing had shown up traces of StarLink.

"There were some well-crafted plans on how to contain it, and for the
farmers to channel it," he added.

David Feider, a spokesman for Cargill Inc., the top grain exporter in the
United States, said the company was also continuing to test its grain
supplies for StarLink.

Latest data from the U.S. Agriculture Department showed that corn purchases
by South Korea so far in the 2001/02 season, which ends Aug. 31, were only
45 percent of last year's pace.

South Korea bought a total of 1.1 million tonnes in the week ended April 18,
compared with 2.1 million in the same year-ago period, USDA's Thursday
weekly export sales report showed.

The Asian country had turned to Argentina and China as substitute sources of
corn for human consumption, U.S. exporters said.

Export sales to Japan totaled 11.3 million tonnes in the week of April 18,
up from 11.2 million in the year-ago period. Japan is forecast by the USDA
to import 15.3 million tonnes in the 2001/02 season, down from 16.3 million
in 2000/2001.

Exporters pegged the expected fall in Japan's corn imports to an outbreak of
mad cow disease in the country, detected in September last year, which has
hit meat consumption there.

Story by K.T. Arasu

REUTERS NEWS SERVICE

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