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Japanese Buying Biotech For Food Use

A major Japanese wet miller now will buy biotech corn for food production.

According to an article in a Japanese trade paper, "Daily Feed News," a major Japanese wet miller, Kato Kagaku Co., Ltd. (also known as Kato Chemical) will start accepting non-segregated commodity corn to use for production. The company buys corn for production of starch, sweeteners supplied to beer breweries, soft drink manufacturers, and various processed foods used in industry sectors.

Since 2000, Kato Chemical has been buying non-genetically modified corn via an identity preserved (IP) handling system. According to Hiroko Sakashita, associate director of USGC's Tokyo office, several factors influenced the company's decision to purchase genetically modified (GM) corn.

"The decision came as a result of high crude oil prices and the rapid growth of corn-derived alternative fuels," she says. "Such circumstances have invited higher corn prices and a partial shift of IP corn growers to higher-yield GM corn."

Kato Chemical explained its reasons for purchasing biotech corn to its major customers before publicly announcing its decision last week. The company cited prospects of an even tighter supply of non-GM corn and anticipated difficulties getting IP corn exclusively as reasons for its decision. Kato Chemical's announcement reflects decisions being made by other industrial corn processors in Japan.

"Kato Chemical's purchase was simply a business decision based on economics and the raw material needs of the processor," says Mike Callahan, U.S. Grains Council director of overseas operations for Asia. "Some -- but not all -- Japanese corn processors have decided to ‘supplement' some of their raw material requirements with GM corn, but among most industrial corn processors there is still demand for IP, non-GM corn."

In the past, Kato Chemical has actively participated in Council programs and meetings regarding value enhanced grain and biotech products. In almost every year since 2000, the company has joined a fact-finding team which has visited the U.S. in an effort to learn more about corn supply, development, and the benefits of innovative technology. In 2007, the Japanese wet milling sector bought 3.4 million metric tons (1.3 billion bushels) of corn. Buyers purchased 3.511 million tons (138 million bushels) in 2006 and 3.512 million tons (13.8 million bushels) in 2005. The U.S. enjoys an over 97 percent market share in the Japanese corn sector.

(Source: U.S. Grains Council)