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Malaysia power shift hits China infrastructure drive

KUALA LUMPUR — Malaysia was once a loyal partner in China’s globe-spanning infrastructure drive but a new government is now pledging to review Beijing-backed projects, threatening key links in the much-vaunted initiative.
Kuala Lumpur’s previous regime, led by scandal-mired Najib Razak, had warm ties with China and signed a string of deals for Beijing-funded projects, including a major rail link and a deep-sea port.
But the long-ruling coalition was unexpectedly turfed out of power last month by voters disgusted at allegations of corruption and angered at rising living costs.
Critics say many agreements lacked transparency, fuelling suspicions they were struck in exchange for help in paying off debts from a financial scandal which ultimately helped bring down Mr. Najib’s regime.
The new government, led by political heavyweight Mahathir Mohamad, has pledged to review Chinese deals seen as dubious, calling into question Malaysia’s status as one of Beijing’s most cooperative partners in its infrastructure push.
China’s ambitious initiative to revive ancient Silk Road trading routes with a global network of ports, roads and railways — dubbed “One Belt, One Road” — was launched in 2013 and is the economic crown jewel of President Xi Jinping’s presidency.
Malaysia, along with Beijing ally Cambodia, were seen as bright spots in Southeast Asia, with projects in other countries often facing problems, from land acquisition to drawn-out negotiations with governments.
“Malaysia under Najib moved quickly to approve and implement projects,” Murray Hiebert, a senior associate from think-tank the Center for Strategic and International Studies, said in an interview.
Chinese foreign direct investment (FDI) into Malaysia stood at just 0.8% of total net FDI inflows in 2008, but that figure had risen to 14.4% by 2016, according to a study from Singapore’s ISEAS-Yusof Ishak Institute.
However, Mr. Hiebert said it was “widely assumed” that Malaysia was striking quick deals with China in the hope of getting help to cover debts from sovereign wealth fund 1MDB.
Mr. Najib and his cronies were accused of stealing huge sums of public money from the investment vehicle in a massive fraud. Public disgust at the allegations — denied by Mr. Najib and 1MDB — helped topple his government.
BEIJING’S PLANS DERAILED?
Malaysia’s first change of government in six decades has left Mr. Najib facing a potential jail term — and appears to have already unsettled Beijing’s plans in the country.
New prime minister Mr. Mahathir has announced a planned high-speed rail link between Kuala Lumpur and neighboring Singapore will not go ahead as he seeks to reduce the country’s huge national debt.
The project was in its early stages and had not yet received any Chinese funding as part of “One Belt, One Road”.
But Chinese companies were favoured to build part of the line, which would have constituted a link in a high-speed route from China’s Yunnan province to trading hub Singapore, along which Chinese goods could have been transported for export.
Work has already started in Malaysia on another line seen as part of that route, and which had received Chinese funding — the $14-billion East Coast Rail Link, running from close to the Thai border to a port near Kuala Lumpur.
Mr. Mahathir has said that agreement is now being renegotiated.
Other Chinese-funded initiatives include a deep-sea port in Malacca, near important shipping routes, and an enormous industrial park.
It is not clear yet which projects will be changed or cancelled but experts believe axing some will be positive.
Alex Holmes, Asia economist for Capital Economics, backed cancelling some initiatives, citing “Malaysia’s weak fiscal position and that some of the projects are of dubious economic value”.
The Chinese foreign ministry did not respond to request for comment.
But a recent commentary in China’s Global Times, a nationalist state-run tabloid, warned Mr. Mahathir if he damaged the interests of Chinese companies, they had the right to seek compensation.
“The Chinese government will also take concrete measures to safeguard the interests and rights of Chinese enterprises,” it said.
Adding to China’s woes, Mr. Mahathir has a clear preference for Beijing’s rival Japan, and last week went to Tokyo for his first foreign trip since taking office.
During the visit, the 92-year-old signalled ties with Beijing would cool: “We will be friendly with China, but we do not want to be indebted to China.” — AFP

Tanduay aims to enter Europe within 3-5 years

TANDUAY DISTILLERS, Inc. (TDI) looks to enter the European market within the next three to five years, as it scouts for opportunities to bring its rum brand overseas.
“I think Europe will be our next market… that’s within three to five years. What we really need is a distributor,” TDI Chief Financial Officer Nestor C. Mendones told reporters after a company press conference last week.
Mr. Mendones cited the current weakness of economies of European countries, which affords them a chance to break into the market.
“Depressed yung economies (sa Europe ngayon) eh, so yung mga high-priced drinks walang maka-afford, so may chance makapasok ang Tanduay (The European economies are depressed right now, so not many can afford high-priced drinks, Tanduay has a chance),” he said.
The TDI executive added the company is looking at offering the Tanduay Asian Rum brand to the European market.
TDI currently exports its products to Hong Kong, United States, and United Arab Emirates through various distributors. Sales to these markets account for less than one percent of TDI’s total sales.
Mr. Mendones said the company has seen challenges in penetrating the US market. While he noted that rum is one of the highest growing drinks in the region, TDI has had to face different regulations in every state.
“Sa US kasi, iba-ibang state, iba-ibang regulation, iba-ibang distribution setup. Hindi gaya ng Pilipinas na isa lang gagamitin mong strategy for the whole Philippines. Saka very strict sila on advertising (In the US, states have different regulations, different distribution setup. Unlike in the Philippines where you can just use one strategy for the entire country. The US is also very strict on advertising),” he explained.
Recently, TDI announced that Tanduay is now the best-selling rum in the world, overtaking global rum brand Bacardi. The higher sales was primarily due to higher sales volume in the Visayas and Mindanao areas, following the company’s more aggressive advertising campaigns there.
The company sold 19.5 million cases in 2017, a 17% year on year jump. Meanwhile, Bacardi sold 16.8 million during the period, or 3% lower the year before.
With this, TDI booked a 12% jump in revenues to P16.79 billion in 2017. Net income, however, slumped by a third to P633 million due to higher input costs.
In the first quarter, TDI’s net income also slowed by 35% to P135 million, while revenues were flat at P4.243 billion.
TDI is part of tycoon Lucio C. Tan, Sr.’s LT Group, Inc. (LTG) The listed conglomerate also has core interests in banking through Philippine National Bank, tobacco through PMFTC, Inc., and property development through Eton Properties Philippines, Inc. — Arra B. Francia

Seed supply company targets growing urban farming market

VEGETABLE and flower seed producer and supplier East-West Seed Co. is planning to expand its portfolio by offering vertical farming solutions such as hydroponic units and smaller greenhouses to urban dwellers.
East-West Seed Co. Agricultural Engineer Pedro F. Dayag III, who designed the hydroponic unit prototypes, said that the company decided to target prospective urban farmers due to strong interest.
“We’re still more concentrated on farmers in the provinces. We rarely entertain urban. Now, since our technology has achieved scale, we will bring it to urban [farming],” he added.
“[For urban farming], we are trying to educate those who eat vegetables that they can also do it on their own. It doesn’t really have to come from big farms. It also has a lot of benefits — aside from eating vegetables, you know how it’s planted. It’s also therapeutic [to grow your own vegetables].”
Mr. Dayag said that while hydroponic units are not yet available for mass production, the company will accommodate individual orders.
“If there’s an inquiry and someone wants it made then we can probably accommodate because is what we are really selling here is the greenhouse [for urban farming]. Greenhouses have a repeat-buy but this one (hydroponic unit) is only a one-time buy,” he added.
East-West Seed Co. got into the business of manufacturing and installing greenhouses almost 10 years ago at the request of farmers who buy seeds from the company. Mr. Dayag said that while greenhouses can be customized, these usually come in two sizes, 3.5 meters by 18 meters and 6 meters by 24 meters.
If built and installed in Manila, the greenhouse can cost to about P50,000 to P55,000. This does not, however, include the hydroponics units inside.
The company last month exhibited a hydroponic unit which can cost around P6,000 to P8,000, which includes the aquarium pump to circulate a solution outsourced from the University of the Philippines-Los Baños. At a height of about four feet, the unit can accommodate around 72 receptacles for growing vegetables.
“I was thinking of a design [for hydroponics] that can be used in condominiums with its own lighting and aquarium pump,” Mr. Dayag said.
“All the end-user has to do [is] to choose what to plant — it can be lettuce, kangkong (water spinach), pechay (bok choy). And on the first week, they plant only on the first layer, and add another layer on the second week so that they won’t run out of vegetables. For a single person, that’s a lot.”
Field marketing representative Cusrome Loi S. Adaro said that aside from hydroponics, the company is also offer repurposed pallets for gardening.
“We had that idea because we had so many pallets in the office that remained unused. We also had another project, the “seed in the city,” where we conducted urban farming seminars to get ideas like that,” he added.
“It is now possible that the land needed for farming not be that big; that’s why we thought of projects such as container gardening. That it our focus right now but [rural] farmers are really still our main market.” — Anna Gabriela A. Mogato

Here come the brides


WITH the imposing seven-foot wedding cake by Bruneian cake designer Faridah Yussof serving as a backdrop, a series of brides walked down the center of The Peninsula Manila’s famed Lobby for a rare fashion show that served as the highlight of the Weddings at The Pen 2018 wedding fair on June 9.
Wearing dresses by Jojie Lloren, Joey Samson, Mak Tumang, Mark Bumgarner, and Michael Leyva, the models including Tweetie de Leon, Marina Benipayo, and Jo Anne Bitangcol, swept down the The Pen’s elegant staircase — assisted by cute little pages dressed in bellhop outfits — in a stunning series of outfits that ranged from the austere to the extravagant.
From Lloren’s Victorian-flavored pantsuit and sleek terno to Tumang’s explosion of ruffles and oversized blooms, Samson’s biker jacket and sleek suit to Leyvra and Bumgarner’s gigantic skirts, there was something to suit the taste of every kind of bride. One thing all the brides could be certain of what this — no matter how grand their surroundings, in these dresses they are sure to be the center of attention.

Tan-led Infracorp eyes O&M partner for Skytrain

By Arra B. Francia, Reporter

SKYTRAIN will connect Metro Rail Transit Line 3’s Guadalupe station to Uptown Bonifacio in Taguig City.

INFRACORP Development, Inc. is currently looking for an operations and maintenance (O&M) partner for its P3.5-billion Skytrain project, saying it is speaking with several firms from Austria, France, Japan and China.
“Some of the suppliers that have been offering their technology to us have offered to partner with us for the O&M as well, so we’re considering that option cause it also makes sense whoever supplies will be the one who operates it,” Infracorp President Kevin Andrew L. Tan said in a press briefing after Megaworld Corp.’s annual shareholders’ meeting in Quezon City on June 15.
Mr. Tan said the company should be able to decide on the O&M partner by the fourth quarter of this year.
Infracorp has recently secured original proponent status for its proposed Skytrain project, a monorail linking Metro Rail Transit Line 3’s Guadalupe station to Megaworld’s Uptown Bonifacio township in Taguig City.
The railway is set to carry 350 passengers per five-minute trip, for a total of around 60,000 to 100,000 commuters per day.
The proposal is now with the National Economic and Development Authority’s board for review, which the company expects to be completed by next month.
SKYTRAIN TO CIRCUIT MAKATI?
Mr. Tan said the Ayala group has also formally approached them to extend Skytrain all the way to Makati City. This will allow the monorail to connect Guadalupe Station to Ayala Land, Inc.’s 21-hectare mixed-use estate called Circuit Makati.
“We have yet to really sit down on it, but they have actually already proposed to us and spoken to us about it. And I think they also have their own strategy or version of how to expand it, so we’ll see,” Mr. Tan explained.
The Infracorp chief noted that Skytrain can be further expanded toward the Taguig side, depending on how the group would “want to complement what the government is doing today.”
Asked what other projects the company is looking at, Mr. Tan said this will depend on the needed connectivity for its sister firm Megaworld’s townships.
“Our goal is to create much necessary connectivity and efficiency with our various townships and tourism estates so anything that can be connected and improve access is our priority. So that can be in the realm of rails and even roads,” Mr. Tan said.
PET CLINICS
Mr. Tan, who also sits as senior vice-president for Megaworld, said the property company is also looking to expand its network of pet clinics within the townships. Pet clinics have been among the trademark tenants in Megaworld’s malls.
“We’re working with several partners, we just actually opened a very large pet clinic in McKinley West, we call it Vets in Practice. So we’re trying to see how we can work with them, and see how we can work with them and roll out pet clinics all over our townships,” he explained.
Companies have recently been showing interest in pet care clinics, with Gokongwei-led Robinsons Retail Holdings, Inc. also venturing into the segment through a franchise agreement with Singaporean firm Pet Lovers Centre.
Infracorp and Megaworld are both part of tycoon Andrew L. Tan’s Alliance Global Group, Inc. The conglomerate’s other core businesses include liquor, gaming, and quick serviced restaurants.

Cuba hopes to avoid importing sugar, will reduce future exports

HAVANA — Cuba, short on sugar for domestic consumption after a disastrous harvest, hopes to avoid importing by drawing on its reserves and plans to begin the coming harvest early, industry officials told Reuters.
The Caribbean island, where sugar once was synonymous with its name, produced 1.9 million tons of raw sugar last year and exported 1.1 million tons, according to the International Sugar Organization. But a prolonged drought, Hurricane Irma in September and out-of-season rainfall devastated this year’s crop.
The harvest usually begins with a few mills operating in late November, and about 50 are crunching cane by January as dry and cool weather set in. Most mills close by May.
Based on provincial media reports and sources, Reuters estimates the recently concluded harvest came in at around 1.1 million tons of raw sugar, similar to more than a century ago.
Liobel Perez, spokesman for Azcuba, the state-run sugar monopoly, on Wednesday refused to confirm or deny the estimate, citing a government policy of providing no real-time figures for the industry.
Cuba consumes 600,000 to 700, 000 tons of sugar and is short after exporting some of this year’s output and not meeting other contracts, traders and shippers said.
“The coming harvest will be moved forward as much as possible to meet domestic consumption,” said Lourdes María Castellanos, director of international relations for Azcuba.
Castellanos said the country would also draw on its reserves “and what is going to be cut a little is exports, not national consumption.”
Castellanos and Perez both said the wet weather, which included extensive flooding in central Cuba in late May, would impact the coming harvest as planting was well behind schedule.
“We are going to have problems in 2018-2019 because the planting of cane, its development and growth have been affected to this day,” Castellanos said.
The decline in output, after a more than 10% annual increase since 2011, is more bad news for Cuba. The country is struggling with a cash shortage due to ally Venezuela’s economic collapse, a hostile and sanctions-wielding Trump administration, a drop in tourism and its own inertia.
The sugar industry also contributes to electricity production and derivatives such as rum and animal feed.
Sugar was long Cuba’s most important industry and export, with output reaching 8 million tons in 1991. But today it ranks behind sectors such as tourism, tobacco, nickel and pharmaceuticals. — Reuters

A Filipino Company


“LUXURY” isn’t what immediately comes to mind when you say “local.” But luxury retailer Rustan’s makes the local chic with its exhibit Celebrating the Finest of the Philippines which is on view at the fifth Floor of Rustan’s Makati until June 22.
Displays of crafts from indigenous people from the north to the south of the country, from Ilocos to Maguindanao, are on display, augmented by food products from local producers, as well as jewelry by Silnag and assorted items of Filipiniana dress.
Displayed side by side with global luxury brands, it gives one a certain sense of pride — and the prices are up there with the giants too: there are embroidered silk and piña items priced at P22,000 and above. Items set with semiprecious stones, as well as lucky charms from the Cordillera region are more modestly priced.
The exhibit also paves the way for some of these producers to supply the Filipino luxury retailer all year-round and not just for special occassions. “We wanted to give these small business owners a chance to be able to sell their products on a year-round basis,” said Michael T. Huang, Rustan’s Vice-President for Store Development. He pointed out that many of these sellers will only be found once or twice a year at trade fairs and such. “It might not even be just for a year,” he said, hinting that some of the exhibitors may become permanent suppliers.
“It’s always been a passion,” said Mr. Huang about filling sections of the store with Filipino goods, jostling for space with brands such as Kate Spade and Meissen. “My grandmother, when she started the store, one of her goals was to promote Filipiniana. Back in the day, when she started, she wanted to give these small business owners a chance.”
While his grandmother, Rustan’s founder Gliceria Tantoco, ironed out deals with Oleg Cassini and other global fashion giants back in the 1950s and ’60s, she also saw fit to promote local designers such as Criselda Lontok.
Rustan’s is known for bringing in foreign luxury goods that wealthy Filipinos might have had to travel abroad for back in the day. While Rustan’s is owned by a Filipino family, could there be the spirit of a Filipino identity in the displays of glossy foreign brands? “Our slogan before was ‘Bringing the best of the world to the Philippines’,” said Mr. Huang. “I’d like to think that giving the Filipino a chance to get these products and have them here for them to buy — I guess you can say it’s a service that we’re very proud of.”
In connection with the exhibition in Rustan’s Makati, a special cooking workshop with celebrity chef Him Uy de Baron on making Filipino food with a modern flair will be held at Rustan’s Shangri-La on June 21. The workshop is open to the public. — Joseph L. Garcia

Brazil’s BRF board elects Chairman Parente as new CEO

SAO PAULO — The board of Brazilian food processor BRF SA on Thursday elected Chairman Pedro Parente to the additional post of chief executive, the company said in a securities filing.
Parente, the former CEO of state-controlled oil company Petróleo Brasileiro SA, will hold both positions for an initial period of 180 days, BRF said. Reuters reported on Wednesday that he had been invited to become CEO.
Parente abruptly left Petrobras on June 1 following government interventions on fuel pricing in the wake of a truckers strike over rising diesel costs.
He was seen as a key element in turning the oil company around in the last two years and his departure sparked a sell-off in Petrobras shares.
Parente has a six-month non-compete agreement as former Petrobras CEO, but received clearance from a government ethics commission on Thursday to take the BRF job because the companies operate in very different areas.
Parente was elected BRF chairman in April when shareholders were seeking a management overhaul in the wake of a food safety probe and poor results.
BRF shares have fallen 43% so far this year. They gained 3.32% on Thursday.
BRF also said it created the new position of global chief operating officer, which will be held by interim CEO Lorival Nogueira Luz, Jr. — Reuters

LTFRB mulling moratorium on new ride-hailing companies

By Denise A. Valdez
THE LAND Transportation Franchising and Regulatory Board (LTFRB) is mulling a moratorium on the entry of more transport network companies (TNC), following the new department order tasking the agency to regulate the transportation segment.
In an interview with BusinessWorld last week, LTFRB Board Member Aileen Lourdes A. Lizada said they may suspend the accreditation of more ride-hailing companies.
“Sa ngayon [For now], with the guidance of the Department of Transportation (DoTr), we are moving towards the direction na we work with those na-accredit na or pending accreditation [to work with accredited TNCs and those with pending accreditation]. And those that have filed, we may put a moratorium on them,” she said.
Grab Philippines and U-Hop are currently seeking to renew their accreditation. The LTFRB had accredited five new local TNCs in April — Hype, Hirna, Owto, Go Lag and Micab.
Ms. Lizada said a moratorium is needed to figure out first how it will handle the existing TNCs.
“Kasi kailangan namin (We need to). There’s a new DO. We have to come up with new MCs (memorandum circulars), and we have a lot of TNCs. Baka magkakalat na naman tayo dito, hindi mo pa alam (We might mess this up, you don’t know). And then we also need to protect our local companies as well,” she said.
She noted that there are a lot of pending applications for accreditation, including Jakarta-based start-up Go-Jek. Go-Jek earlier said it is keen on bringing its ride-hailing service to the Philippines.
The DoTr issued a department order last week giving the LTFRB the full authority and obligation to regulate and supervise TNCs and its transport network service vehicles (TNVS).
“The TNCs and TNVS are subject to the full regulation and supervision by the Land Transportation Franchising and Regulatory Board, including but not limited to application and approval/denial of franchise, setting of fares, routes, operating conditions, and imposition of fines, suspension and cancellation of franchise,” the order stated.
The LTFRB was also directed to issue guidelines on its regulation of TNCs and TNVS.
Because of this new policy, Ms. Lizada said the LTFRB would have to meet all TNCs to discuss the needed changes.
Prior to the approval of the department order, the LTFRB followed a 2015 order that gave TNCs free rein on setting their own fares. She said the revision was necessary to better allow the agency to manage the transportation segment.
“(We need) to come up with memoranda to properly guide us in this new kind of denomination. This is new. We are all learning from this experience,” she said.

T-bill, T-bond rates may ascend ahead of central bank meeting

GOVERNMENT SECURITIES on offer this week will likely fetch higher yields as investors await the policy meeting of the local central bank.
The Bureau of the Treasury (BTr) is offering P15 billion worth of Treasury bills (T-bills) today. Broken down, the Treasury plans to raise P5 billion and P4 billion through the three-and six-month papers, respectively, and another P6 billion in one-year T-bills.
The government will also offer P10 billion in reissued 20-year Treasury bonds (T-bonds) with a remaining life of 19 years and eight months.
A trader said in an interview on Friday that yields on T-bills are seen to move higher by five basis points across all tenors from the previous auction, noting the one-year T-bills “might be partially awarded.”
Last week, the Treasury raised just P12.369 billion out of the P15 billion it intended to borrow via T-bills as yields bid by banks climbed across tenors amid slower-than-expected inflation logged last month.
Full awards were made for the 91-day and 182-day T-bills, fetching average rates of 3.296% and 3.714%, respectively.
However, the BTr only accepted P3.369 billion out of the P6 billion intended borrowing as well as the P7.839 billion total tenders. The average rate went up 7.8 basis points to 4.324% from the 4.246% posted last week.
On the other hand, the trader said the 20-year T-bonds on offer this Tuesday will fetch yields higher by “five to 10 basis points from the previous auction.”
“I’m looking at 6.15%-6.25% range,” another bond trader said.
In April, the Treasury raised just P4.26 billion out of the planned P10-billion borrowing from the reissued 20-year bonds. It fetched an average yield of 6.85% with a coupon rate of 6.5%.
“There will be less demand for sure, especially ahead of the MB (Monetary Board) meeting,” the second trader noted.
At the secondary market last Thursday, the three-month, six-month and one-year T-bills closed at 3.3059%, 3.6613% and 4.2891%, respectively, while the 20-year T-bond was quoted at 7.2893%.
In a BusinessWorld poll, six out of 10 economists expect the rate-setting MB to stay on hold at their June 20 meeting amid signs that inflation may be slowing.
Inflation accelerated further in May to its fresh five-year high at 4.6% from the 4.5% logged the previous month.
“The market will likely focus on the MB meeting rather than the Fed,” the second trader added.
Last week, the Federal Open Market Committee raised its benchmark rates by a quarter of a percentage point amid low unemployment and higher wages.
Aside from this, the first trader said investors will also factor in the weakening of the peso.
It plans to borrow P888.23 billion from local and foreign sources this year to fund its budget deficit, which is capped at 3% of the country’s gross domestic product. — Karl Angelo N. Vidal

Father’s Day at Rustan’s continues all the way to July

OVER at Rustan’s, Father’s Day did not end yesterday as it has a slew of events celebrating Dad all the way to July.
On all the weekends until July 8, gentlemen shoppers can get free grooming by Philips, shoe shining by Crept Protect, enjoy a mini golf game by Jack Nicklaus, indulge in a quick massage, or enjoy sample artisan hot and cold drinks at the Coffee and Beer bars. These are open to all shoppers, with no minimum purchase required. What more, for those who bought new dress shirts and/or handkerchiefs and other items, Rustan’s is offering free personalization or monogramming for new purchases.
These will be held from 3 to 7 p.m. in the following Rustan’s branches: June 23-24 for Rustan’s Shangri-La; June 30-July 1 for Rustan’s Alabang; and July 7-8 for Rustan’s Gateway.
Need a last-minute gift? Rustan’s suggests a linen scarf from AD&C 1956, a fedora hat from Dorfman Pacific, and swim shorts from Bluemint for the traveler, as well as New Balance or Hacket for the perfect pair of sneakers. Travelers need shades and one can get 10% off on select sunglasses from Rayban until June 30.
For the man with a soft spot for cheesy humor, choose novelty items that are also practical: a Buxton wallet with multiple pockets for cards and whatnots, a Discovery Shop jewelry box for prized possessions, a Steve Madden antique money clip, and a Tateossian dice cufflinks.
The drinking man will like a flask from Espacio Handmade, shot glasses with leather cases from Kikkerland, and a Super Dad mug (with its own cape!) from Thumbs Up.
Snazzy dressers will appreciate shirts from Ascot Chang, Pedro del Hiero, or Ricardo Preto, with a few accessories such as pockets square from Tie Bar a belt from Pedro del Hiero, or even shoes from Allen Edmonds thrown in. The laid back dad will appreciate shirts from Faconnable, a crossbody bag from Adolfo Dominguez, a distressed leather bracelet from Thompson London, or a supple pair of suede oxfords from Kurt Geiger.

Japan suspends sale of Canadian wheat after GMO wheat discovered

TOKYO/WINNIPEG, MANITOBA — Japan’s farm ministry said on Friday it has suspended its tender and sale of wheat from Canada after grain containing a genetically modified trait was discovered last summer in Canada’s Alberta province.
The Canadian Food Inspection Agency (CFIA) said on Thursday the wheat containing a genetically modified trait, developed by Monsanto Co. to tolerate the Roundup weed-killer, was discovered in Alberta.
“We are suspending the tender and sale of Canadian wheat until we confirm that the Canadian wheat that Japan buys contains no GMO,” an official at the Japanese farm ministry said.
Canada is one of the world’s largest wheat exporters. While other crops such as corn and soybeans have been widely genetically modified to improve yield or withstand threats, GMO wheat has not been approved anywhere for commercial production because of consumers’ concerns.
The wheat, discovered near a rural road after it survived herbicide spraying, has not been approved for commercial use.
Officials with Japan’s ministry of agriculture, forestry and fisheries are scheduled to visit Canada next week to seek more information, said Cam Dahl, president of industry group Cereals Canada, whose members include Cargill Ltd. and Richardson International.
He said he is concerned that South Korea and China may be next to suspend Canadian wheat imports.
In 2016, Japan and South Korea temporarily suspended US wheat imports after a similar GMO wheat finding.
Losing Japanese buyers, who pay a premium for high-quality, high-protein wheat, hurts Canada and creates opportunities for US and Australian wheat exporters, Dahl said.
Japan’s move also leaves an undetermined volume of Canadian wheat already loaded on vessels needing to find a new market, possibly at bargain rates to Indonesia or Bangladesh, Dahl said. — Reuters

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