UPDATE 2-Canola meal with salmonella traced to Bunge

Source of Article:  http://www.reuters.com/article/marketsNews/idUSN126900420090612?sp=true


Fri Jun 12, 2009 4:00pm EDT

* Two Bunge Canada plants stop canola meal production

* U.S. FDA stepping up checks for salmonella

* Oilseeds group concerned other commodities also affected

* Impact limited on lower canola futures - traders

* Salmonella unlikely to enter milk supply

(Adds FDA response, health and market impacts)

By Rod Nickel

WINNIPEG, Manitoba, June 12 (Reuters) - Two rail car shipments of canola meal from Bunge's Canadian crushing plants tested positive for salmonella after inspection by the U.S. Food and Drug Administration at the border in May, Bunge Ltd (BG.N) said on Friday.

One shipment that tested positive in early May traces back to the Bunge plant in Hamilton, Ontario, said Bunge spokeswoman Deb Seidel. The second shipment tested positive in late May and came from Bunge's plant in Nipawin in the western province of Saskatchewan.

The company immediately shut down the canola lines at each plant, with each now undergoing scheduled cleaning, Seidel said. The company hopes to resume shipping to the United States once it meets all FDA protocols for salmonella, she said.

"We're in the process of cleaning those facilities, making sure everything is OK and working in co-ordination with the FDA and the CFIA (Canadian Food Inspection Agency)," Seidel said.

Bunge, based in White Plains, New York, saw its stock fall 32 cents, or 0.48 percent, to $66.35 in afternoon trading on the New York Stock Exchange.

People who eat food contaminated with salmonella can become ill with salmonellosis, a food-borne illness with flu-like symptoms, according to the Canadian Food Inspection Agency.

The FDA detained the canola meal shipments after finding them contaminated as part of routine inspections, said FDA spokeswoman Rita Chappelle. The shipments remain under review, she said.

Seidel couldn't say how much canola meal the two plants normally ship to the United States.

It's unclear if other companies have had agriculture shipments test positive. The Canadian Oilseed Processors Association (COPA) said on Friday that it's heard multiple shipments of canola meal, along with other unspecified agricultural commodities, have been delayed because of the FDA's implementation of new protocols for salmonella.

"It's looking more like a broader obstacle for everybody that's involved in shipping commodities into the U.S.," said Bob Broeska, president of the association.

Salmonella is an environmental pathogen that's "detectable everywhere," Broeska said, adding it's not unusual to find it in canola or other agricultural products.

"It's just ubiquitous," Broeska said. "The question is how do you contain it, minimize the concentrations, control it?"


Benchmark July canola futures RSN9 on the ICE Winnipeg exchange dropped C$3 to C$473 per tonne in trading on Friday, but pressure from news of the salmonella contamination was overshadowed by lower U.S. soybean futures <0#S:>, which usually set the direction for canola, traders said.

"Just one more bearish influence in a bearish day," one trader said of the salmonella contamination.

Meal from canola, a Canadian variant of rapeseed, is widely used as cattle feed. Some U.S. dairy farmers, already hard-hit by rising feed costs, buy canola meal as a cheaper protein alternative to soymeal.

Any salmonella contamination in the milk supply consumed by humans is unlikely, said Ellen Jordan, a dairy specialist at Texas AgriLife Extension Service.

"Because of the body system of the cow, (salmonella) shouldn't end up in the milk," she said. "But if salmonella did go into the milk, pasteurization will destroy it."

Canola seed is crushed into meal and also oil, for use in vegetable oil and biofuels.

($1 = $1.1225 Canadian)

(Additional reporting by Karl Plume and Jasmin Melvin; Editing by Lisa Shumaker)


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