South Korean Threaten to Boycott U.S Wheat

WASHINGTON, May 2 (Reuters)

South Korean wheat millers, major buyers of American grain, delivered a blunt message this week that they would boycott U.S. wheat if genetically-modified varieties are approved by the Bush administration.

Officials of the Korea Flour Mills Industrial Association (KOFMIA), in the United States to buy 208,800 tonnes of milling wheat, said they told wheat producers and government officials in Montana and North Dakota that use of biotech wheat in America would ruin their trade relationship.

"If GM (genetically modified wheat) comes, consumers will boycott all wheat," predicted Hi Sang Lee, chairman of KOFMIA, which represents all South Korean flour mills.

Currently, the United States supplies more than half of South Korea's wheat import needs, with Australia getting about 40 percent and Canada six percent.

Last year, South Korea imported 2.37 million tonnes of milling wheat that is turned into noodles, bread, soy sauce and other products.

Monsanto Co. (NYSE:MON - News) has been developing the world's first biotech wheat and is seeking approval of the product from the U.S. and Canadian governments. The "Roundup Ready" wheat is modified to withstand application of Monsanto's Roundup herbicide, possibly increasing yields by more than 11 percent, according to the company.

Il Woong Kim, president of Shinhan Flour Mills Co. in Seoul, told reporters that his company also turns corn into corn syrup. U.S. approval of biotech corn for corn syrup, he said, caused South Korea to stop buying the grain from the United States and switch to Chinese and Brazilian suppliers.

STRONG CONSUMER OPPOSITION

He predicted a similar outcome if the United States approves biotech wheat.

Eighty percent of South Korean consumers oppose biotech food, according to recent surveys, and consumer groups are a well-organized force against the technology.

The South Korean millers, fearing consumer backlash, went so far as to ask North Dakota government officials this week to issue a statement saying no hard red spring wheat now grown in the state is biotech.

North Dakota Agriculture Commission Roger Johnson told Reuters it will be "easy enough" to provide such a letter to the South Korean milling industry. He added it likely will be sent next week, but that it would not address what could happen in the future with biotech plantings.

American wheat farmers are split over the controversy and industry groups insist they would oppose planting biotech wheat until there is broad consumer acceptance.

The Korean millers have several concerns about the possible arrival of biotech wheat in major producing countries.

With rice a main staple, they fear consumers would simply abandon wheat as part of their diet. The millers also worry that non-GMO wheat prices could rise if biotech wheat is introduced, reflecting the cost of separating the varieties.

Dong Jin Chung, president of Daehan Flour Mills in Seoul, said the topic is such a hot-button issue that, "We want to talk silently, not openly" about it. "In Korea," he added, "We do not want to discuss" biotech wheat.