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U.S. Corn Exports Plunge 39% Amid Fears Over StarLink

Trade: Overseas buyers fear shipments may be tainted with the biotech grain, which prompted a food recall here.

November 17, 2000|CHRISTOPHER DOERING | REUTERS

WASHINGTON — American corn exports are feeling a backlash from overseas buyers who fear shipments may be contaminated with an unapproved variety of biotech corn, U.S. Agriculture Secretary Dan Glickman said Thursday.

Glickman's comments marked the first public acknowledgment by the U.S. Department of Agriculture that StarLink bio-corn, a variety that turned up in taco shells and chips in late September, is hurting U.S. corn exports to big buyers such as Japan and South Korea.

StarLink was approved by U.S. regulators in 1998 for only animal feed after scientists were unable to determine if the gene-spliced corn might cause rashes, diarrhea, respiratory problems or other allergic reactions in humans.

But the corn, developed by Aventis CropScience of Research Triangle Park, N.C., a unit of Aventis of France, accidentally got into other yellow corn earlier this year and triggered a recent recall of 300 brands of taco shells, chips and other U.S. foods.

StarLink was engineered to contain a gene that protects young corn plants from destructive pests.

On Thursday, the USDA issued a weekly report showing U.S. corn exports were 39% below the four-week average. For the latest week, American corn exports were 517,700 tons, far below market expectations of 550,000 to 750,000 tons.

Japan, the single biggest buyer of American corn, has virtually halted its purchases for the first quarter of 2001 out of fear that some StarLink corn may taint supplies. Japan does not allow StarLink in even livestock feed.

Earlier this week, South Korea said it would not consider buying more U.S. supplies now because of StarLink worries. Both South Korea and Japan have turned to China for corn purchases.

Glickman declined to comment on whether the USDA may trim its forecast of 2.28 billion bushels of U.S. corn export sales this year due to the StarLink controversy.

"It's an issue that has caused concern among some of our importers. That is why we have to work hard to make sure that the company involved [Aventis] does everything they can to get it resolved," Glickman said.

To help allay overseas concerns, the USDA on Wednesday began testing rail cars and barges carrying corn for export.

A rail car containing yellow corn and traces of StarLink will be segregated by federal grain inspectors. The contents will then be earmarked for animal feed or ethanol.

The tests, paid for by exporters, marks the first time the USDA has become involved in genetic testing. It has been an enthusiastic advocate of bioengineered crops and viewed them as no different from conventional ones.

The National Corn Growers Assn. said it is confident that U.S. exporters could satisfy the concerns of overseas buyers and preserve American corn sales.

"A good business takes care of the customer's needs," said a spokesman for the association. "I think they can get this worked out."

Glickman also said Aventis could face steep legal and liability costs over the contamination. Iowa and 15 other states have demanded that the company compensate farmers for economic losses, or face a lawsuit.

"There are possibilities that there are going to be losses out there, and somebody is going to have to compensate them," Glickman said. "I would suspect . . . they are not out of the woods yet."

Aventis said Wednesday that it plans to sell its agricultural chemicals and seeds business to focus on its faster-growing drug operations.

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