U.S. wheat rejected due to smut fungus

Qiuxin Wu wu at TFM.FMNH.ORG
Thu Jun 27 10:58:24 EST 1996


Any comments?

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Wheat Fight Flares Between US, China

WASHINGTON (Reuter) - News that China has rejected a second cargo of U.S.
wheat in less
than a month has shaken the grain industry, and officials said the situation
could have serious
impacts for U.S. grain shippers. 

``China is one of the top markets for U.S. wheat ... This is a real downer.
It is a big, big deal,''
said a grain industry official who asked not to be identified. 

Agriculture Department officials confirmed Wednesday that China had rejected
a shipment of U.S.
wheat due to detection of the tilletia controversa kuhn (TCK) fungus. 

According to officials, the U.S. embassy in Beijing notified the agriculture
agency late Tuesday that
a 50,000 metric ton vessel of U.S. wheat -- worth some $10 million -- is
being held at a Chinese
port. 

This is the second such rejection by the Chinese this month of U.S. wheat
because of reported
contamination by the TCK smut fungus. The Chinese also refused to take a
55,000-ton shipment
on June 6. 

The U.S. grain industry and the Agriculture Department said China's action
represents a serious
contract violation. 

``This is a very serious matter for us ... This is not a good sign,'' said
Paul Drazek, senior trade
advisor to Agriculture Secretary Dan Glickman. 

``This is a tremendous concern to us,'' said Jim Frahm of the U.S. Wheat
Associates. ``We feel
that China needs to justify this decision.'' 

Wheat prices at the Chicago and Kansas City grain exchanges dropped in
reaction to news of the
latest rejection. 

China is the world's largest importer of wheat, and in recent years has
risen to one of the biggest
buyers of U.S.-grown wheat. 

China has been purchasing between 10 million and 12 million tons of wheat
annually from global
markets in the past few years, with about a third of this from the United
States. 

Grain experts say that rising income levels in China and a corresponding
demand for a better diet
holds great potential for U.S. producers, and have forecast that China could
become the single
largest buyer of U.S. wheat in the near future. 

High level talks have been underway in Beijing between U.S. and Chinese
officials on the issue,
and Glickman met with the Chinese ambassador last week in Washington to
discuss the matter. 

Agriculture Department press secretary Tom Amontree said at this time
Glickman has no plans to
meet again with the Chinese official, but noted that Glickman is out of
town, and that the situation
``can change moment to moment.'' 

``We are not pleased with this ... We continue to try to resolve it, but
this is not a positive
development,'' he said. 

Current contracts between wheat shippers and the Chinese stipulate that if a
grain shipment is
found to have traces of TCK smut, the exporter will pay for fumigation and
the Chinese will
accept the wheat at a discounted price. 

``We're going to continue to put the appropriate pressure on the Chinese to
go back to the system
that was in place before the first rejection -- a system that was working
very well,'' said Drazek. 

TCK smut is a fungus that has been found in past years in growing areas in
the Pacific Northwest
regions of the United States. It has never been shown to endanger human health. 

The TCK issue has long been a sore point between the United States and China. 

China has for years refused to take wheat out of the Pacific Northwest areas
because of concerns
over TCK contamination, and the U.S. wheat industry has contended that
China's concerns are
unwarranted. 


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Dr. Qiuxin Wu  
Department of Botany                     Phone: (312)-922-9410, ext. 718
The Field Museum                          Fax: (312) 427-2530
Chicago, IL 60605-2496                 e-mail: wu at tfm.fmnh.org
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