By Randy Fabi
WASHINGTON, Oct 27 (Reuters) - U.S. grain exporters expressed relief on Friday after the government lifted export restrictions on shipments tainted with traces of an unapproved biotech corn, allowing shipments of previously banned corn to Latin America, Asia and Europe.
While the Clinton administration action removes some legal liability for exporters, companies said they are still worried about losing overseas sales to other nations.
The U.S. Agriculture Department said late Thursday it would allow the shipment of U.S. corn exports inadvertently commingled with traces of StarLink corn under certain conditions.
StarLink, made by Aventis SA , is not permitted in human food because of regulators' concerns about a potential allergic reaction.
The discovery last month that some of the StarLink corn had slipped into the human food supply has unleashed a series of recalls of taco shells, chips and other foods, as well as widespread testing by food companies.
U.S. agribusinesses, like Archer Daniels Midland Co. and Cargill Inc., said the government's new announcement cleared up some confusion within the industry over how to handle grain shipments with traces of StarLink corn.
In an Oct. 6 letter, the USDA had told the grain industry that "StarLink corn may not be lawfully sold for use in human food or for export."
Until now, StarLink corn was permitted only for U.S. industrial non-food use and U.S. animal feed, under the 1998 approval granted by the Environmental Protection Agency.
Larry Cunningham, vice president of ADM, said a couple of dozen elevator houses were found to have traces of StarLink corn, and the company did not know what to do with it.
"We were handicapped because we could only go to domestic feed lots," Cunningham told Reuters in a telephone interview. But with the government clarification, ADM and other grain exporters can now market to the international feed market.
"We can start doing business again," Cunningham said.
However, other industry experts said many more questions remain - including whether foreign buyers will maintain import volumes of U.S. corn.
"We are not out of the woods yet," said Eric Erickson, vice president for the U.S. Grains Council.
U.S. government officials were scrambling to ease rising concerns from Japan and the European Union, who fear the StarLink corn could find its way into their food supply.
Japan's Agriculture Ministry said on Friday it had asked visiting U.S. officials not to export corn containing StarLink. Japanese supermarkets and stores have already pulled products containing it from shelves.
Japan is the world's largest corn importer and buys about 16 million tonnes per year, including four million tonnes for food and the rest for feed.
ADM executives said its corn shipments would be travelling to South America, Europe, Mexico and Latin America, but not to Japan.
"I think we are going to have to wait a little bit on Japan," Cunningham said. "That is a front burner issue over there and I don't think they are going to reverse their feel overnight."
Argentina is seen as a possible competitor that could cash in on this controversy and take some U.S. business away in Asia.
(C) Reuters Limited 2000.:
