US-CHINA WHEAT SPAT NOT LIKELY TO GO AWAY

US-CHINA WHEAT SPAT NOT LIKELY TO GO AWAY

The dispute between U.S. exporters and Chinese buyers over the quality of U.S. wheat supplies probably will be a long-term hurdle for the American grain industry, according to a U.S. wheat official.

Both U.S. exporters and Chinese buyers need to make a serious effort to improve communication at the first hint of any potential snag in wheat sales, said Winston Wilson, president of U.S. Wheat Associates. There have been signs of improvement, he added.Mr. Wilson recently returned from meetings in Beijing with officials for China's buying agency, Ceroilfoods Inc.

He said the meetings went well and they discussed the more-than-20-year-old problem with possible smut contamination in U.S. wheat. China bans the importation of all wheat containing TCK smut spores.

Earlier this month, China halted a scheduled September shipment of U.S. wheat because of concerns it was contaminated with TCK smut.

But on Wednesday, China announced it would begin seeking freight offers for a delayed 350,000-metric ton U.S.-subsidized wheat shipment for delivery sometime in October.

China purchased nearly 800,000 metric tons of U.S.-subsidized wheat on July 28 for August-October delivery.

Mr. Wilson said the first shipment of U.S. wheat consisted of old-crop (1991-92) wheat supplies and Chinese officials said there was evidence of TCK smut. The remainder of the shipment is expected to consist of 1992-93 wheat supplies.

Mr. Wilson said he thought the smut problem was resolved for now, and at this point there has been no sign of TCK smut problems with the recently harvested crop.

There was little initial reaction to the news China will take delivery of the wheat, but for those exporters that completed the Chinese sale, there probably was a sigh of relief that the wheat now can be shipped, export sources said.

China purchased 365,000 tons of wheat from Cargill Inc., 233,120 from Continental Grain Co., 90,000 from Louis Dreyfus Corp., 60,000 from Central States Enterprises Inc. and 50,000 from J. Aron and Co.