Japan food maker starts buying genetically modified corn

Nihon Shokuhin Kako Co. Ltd., Japan's largest buyer of corn for use in food, is importing genetically modified supplies for the first time this year as high prices deter gene-pure purchases, a company executive said.
The Tokyo-based company plans to process 250,000 metric tons of U.S. GMO corn in 2008, signaling a change in policy on corn procurement, Mikio Shoji, director at Nihon Shokuhin Kako, said in an interview. The company, a subsidiary of Mitsubishi Corp., is the biggest of 11 Japanese corn-starch makers and buys more than 750,000 tons of the grain annually.
Food makers in Japan, the world's largest corn importer, pay a premium for non-modified supplies because of consumer concerns that GMO varieties may not be safe. Corn prices have risen 56 percent in the past year and reached a record US$6.16 a bushel in Chicago on April 9.
"We have no choice but to use GMO corn, as the grain is becoming increasingly costly and the price differential between GMO and non-GMO supplies is widening," Shoji said April 11.
Nihon Shokuhin Kako previously used only non-GMO crops to produce sweetener for soft drinks and confectionery.
"Given soaring costs for non-GMO corn, it's an inevitable move and will be followed by other food makers in Japan," Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said by phone.
Non-GMO corn harvested in the U.S. last year is US$0.80 to US$1 a bushel more expensive than GMO corn, Shoji said. The premium is expected to double for crops this year, as farmers plant more GMO varieties that are easier and cheaper to grow, he added.
"Non-GMO corn is becoming a rare and premium product," Shoji said. GMO varieties are expected to represent 80-85 percent of overall corn to be planted in the U.S. this year, rising from more than 70 percent last year, he added.
Japan imported 16.6 million tons of corn last year, according to the Finance Ministry. Of the total, 93 percent was from the U.S., the largest producer and exporter of the grain. The ministry gave no breakdown for GMO and non-GMO supplies.
Japan Starch & Sweeteners Industry Association estimates 3.7 million tons of corn was used in the year ended March 31 to produce starch, which was processed into sweetener.
The cost of buying U.S. corn has more than doubled in the past two years to 38,000 yen (US$376) a ton, including freight, Shoji said. The company raised prices of its products by 15 yen a kilogram this month to pass on rising costs.
Nihon Shokuhin Kako will keep supplying products made from non-GMO corn to customers resistant to modified crops, such as beer brewers and sauce makers, Shoji said. Producers of soft drinks and confectionery are generally accepting sweetener made from GMO corn, he added.
"They won't cause any problem in terms of food safety," Shoji said. Japan allows food companies to use genetically modified crops that the government confirms as safe to eat.
The country has approved 36 varieties of GMO corn, including products of Monsanto Co., the world's biggest seed producer, and Switzerland's Syngenta AG, according to the Ministry of Health, Labour and Welfare.