11/15/06 Changes in Japan`s wheat buying

Farm and Ranch November 15, 2006 The Ministry of Agriculture in Japan has traditionally purchased all imported wheat into Japan and then resold it to millers. John Oades of U.S. Wheat Associates Portland, Oregon office says that is going to begin to change next April when Japan begins something called Simultaneous Buy and Sell. Oades: "And instead of the Ministry of Agriculture buying it and reselling it what they do is allow buyers inside Japan to match up with Japanese trading companies to agree on what they are going to buy and then simply pass it across the Ministry of Agriculture books with an element of mark up and return to the Ministry." Oades says Simultaneous Buy-Sell will begin to apply to all Japanese durum imports and Australian Prime Hard wheat in April of 2007. He says eventually they plan to adopt it for all classes of wheat from all origins. Oades: "But we have not seen the schedule for that. I am sure it will take several years to that to occur. They will proceed very slowly in this change over to work out the details to make sure it is functioning appropriately and as that occurs then they will add additional classes." The bottom line says Oades is that millers will have more say in wheat purchases and there will be more competition among them. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.