Japan starts first GM-free futures contract

By Gillian Tett, Financial Times, 22 March 2000

Japan is introducing the world's first futures contract designed to trade agricultural produce free of any genetic modification.

The GM-free contract, to cover soyabeans, will be launched in May. It has been prompted by rising alarm among Japanese consumers about imported soyabeans in traditional foods such as tofu, soy sauce and miso soup.

Japan is believed to be the world's largest importer of GM foods, almost all of which come from the US and which primarily consist of soyabeans and grain.

Thus far no other country has said it will copy the GM-free contract, which is being launched on the Tokyo Grain Exchange. The new contract highlights the degree to which controversy about GM products is spreading to Japan, after triggering a flurry of consumer unease in Europe last year.

The controversy about GM seems likely to grow in the coming months, potentially straining trade relations between Japan and the US agricultural lobby, which has hitherto been at the forefront of the GM industry.

The issue of soybeans is particularly controversial. Although soyabeans are a core part of the Japanese diet, Japan imports almost all the 5m tonnes of beans it uses each year, mostly from the US.

The Japanese government estimates that about half of all soyabeans and grain used in Japan could be GM-originated. The use of GM products in grain has attracted no protest because it is primarily used for animal feed.

But in recent months consumer groups have started to protest against GM soyabeans through initiatives such as a My Tofu campaign, which suggests that Japanese households should buy domestically-grown GM-free beans.

The government has announced that from next April it will introduce compulsory labelling to indicate whether GM-products have been used.

The US insists GM products are safe, but Japanese trading companies are demanding that GM and non-GM beans are separated.