* Japan cancels tender to purchase some U.S. wheat
* EU preparing to test incoming shipments
* Importers to seek details from U.S. government (Adds Oregon researchers in second section)
By Julie Ingwersen and Charles Abbott
CHICAGO/WASHINGTON, May 30 (Reuters) - U.S. officials raced to quell global alarm on Thursday over the first-ever discovery of an unapproved strain of genetically modified wheat, working to figure out how the rogue grain escaped from a field trial a decade ago.
In the wake of news that a strain developed by biotech giant Monsanto Co had been found in an Oregon field late last month, major buyer Japan cancelled plans to buy U.S. wheat while the Europe Union said it would step up testing. Worried U.S. farmers wondered if their own fields had been contaminated.
Even after weeks of investigation, experts are baffled as to how the seed survived for years after Monsanto had ceased all field tests of the product. It was found in a field growing a different type of wheat than Monsanto’s strain, far from areas used for field tests, according to an Oregon State University wheat researcher who tested the strain.
Nine Department of Agriculture investigators are now on the ground in and around Oregon, collecting evidence including witness statements, records and samples, USDA spokesman Ed Curlett said. There is no timeline for concluding the enquiry, said wheat industry sources who were briefed on Wednesday.
“We have increased the number of investigators throughout this month to work quickly and carefully to cover as much ground each day to determine what we are dealing with, how it got there, and where it might have gone,” Curlett said.
The USDA said the GM wheat found in Oregon posed no threat to human health, and also said there was no evidence that the grain had entered the commercial supply chain.
But the discovery threatens to stoke consumer outcry over the possible risk of cross-contaminating natural products with genetically altered foods, and may embolden critics who say U.S. regulation of GMO products is lax.
It is all the more alarming because the wheat strain was thought to have been eliminated after test trials ended in 2005, as Monsanto abandoned efforts to secure regulatory approval due to worldwide opposition. While there have been more than 20 majors violations of U.S. regulations on handling or co-mingling biotechnology crops, none have ever involved wheat before.
U.S. wheat merchants did not report any cancellations of purchases on Thursday, and there was little reaction in the Chicago futures market, where prices dipped. Asian wheat importers South Korea, China and the Philippines said they were monitoring the situation. The world’s biggest wheat importer, Egypt, said it had no fears yet over supplies.
But some analysts feared a potentially damaging blow to the $8 billion wheat export business, recalling the more than yearlong disruption to corn sales following a similar discovery in 2000.
“Unless there’s a quick resolution, this is not going to be good for the export market,” said Art Liming, grain futures specialist with Citigroup.
Bob Zemetra, the Oregon State researcher, said a local farmer contacted the university in late April after noticing that some wheat plants survived an application of herbicide that was being used to kill off unwanted plants in the fallow field.
Most plants died, but a few wheat plants unexpectedly emerged after the spraying. Researchers determined the wheat is a strain of Roundup-Ready tested by Monsanto in Oregon fields from 1999 to 2001.
GM crops tolerate certain pesticides, allowing farmers to improve weed control and increase yields.
Zemetra said Monsanto had been field-testing spring wheat, while the “volunteer” plants discovered in the eastern Oregon field were winter wheat. The two varieties pollinate at different times, making it unlikely for the GMO traits to have been carried into the field by wind.
“That’s why it’s a mystery,” he said.
Farmers, wondering whether their wheat could unknowingly be genetically modified, have flooded farm bureaus with questions. They should not spray crops with Roundup to check whether they will survive, said Mike Flowers, extension cereals specialist for Oregon State University.
“The recommendation right now is to not panic,” he said. “We really need to let the investigators do their jobs and get more information before people panic. We don’t know if it’s widespread. Right now, we know it’s in one field.”
While most of the U.S. corn and soybean crops come from genetically modified plants, no GM wheat varieties are approved for general planting in the United States or elsewhere, the USDA said. The EU has asked Monsanto for a detection method to allow its controls to be carried out.
Genetically modified crops cannot be grown legally in the United States unless the government approves them after a review to ensure they pose no threat to the environment or to people.
Environmental activists expressed alarm at the discovery.
“The developers of GE wheat have repeatedly said that GE wheat will not contaminate conventional or organic wheat because it is predominantly self-pollinating. Despite these empty promises, GE contamination has happened,” Greenpeace International scientist Janet Cotter said, using the acronym for genetically engineered.
“The only way to protect our food and environment is to stop the releases of GE crops to the environment - including a ban on field trials.”
On Wednesday, Monsanto said there was “considerable reason” to believe that the presence of its product was “very limited.”
Past discoveries of unapproved corn and rice varieties in the supply chain have shuttered export markets for months and cost billions of dollars in lost revenue.
The latest finding revives memories of farmers unwittingly planting genetically modified rapeseed in Europe in 2000, while in 2006 a large part of the U.S. long-grain rice crop was contaminated by an experimental strain from Bayer CropScience , prompting import bans in Europe and Japan.
The company agreed in court in 2011 to pay $750 million to growers as compensation.
But some said the more apt precedent involved StarLink corn, a GMO variety not approved for human consumption that was found in a shipment of corn in Japan in 2000. Shipments to Asia were cut deeply for more than a year afterward.
Asia imports more than 40 million tonnes of wheat annually, almost a third of the global trade of 140-150 million tonnes. The bulk of the region’s supplies come from the United States, the world’s biggest exporter, and Australia, the No. 2 supplier.
The Philippines, which buys about 4 million tonnes of wheat a year and relies mainly on U.S. supplies, is waiting for more details before acting, an industry official in Manila said.
Wayne Bacon, president of French-based grain trader Hammersmith Marketing, said some consumers would have a knee-jerk reaction.
“We all buy things with GM products in it every day, we just don’t know about it, but if suddenly we know that the loaf of bread we are buying is made from GMO wheat then it becomes a very negative thing with the consumer,” he said. (Additional reporting by Chuck Abbott in Washington, Tom Polansek and Julie Ingwersen in Chicago, Naveen Thukral in Singapore, Niu Shuping in Beijing, Erik dela Cruz in MANILA, Jane Chung in SEOUL, Yayat Supriatna in JAKARTA, Valerie Parent, Michael Hogan and Sarah Mcfarlane; writing by Veronica Brown and Karl Plume; editing by Richard Pullin, Keiron Henderson, Jonathan Leff and Mary Milliken)