By Anna Yukhananov
WASHINGTON (Reuters) - U.S. health regulators will soon release a batch of orange juice imports from Canada, the first supplies to enter the country since authorities began testing for an illegal fungicide widely used by top supplier Brazil.
The Food and Drug Administration said this week it was testing orange juice shipped into the United States for carbendazim, a chemical that is illegal for U.S. citrus but commonly used in Brazil to fight mold on trees. Juice that tests positive will be stopped at the border.
Preliminary findings showed three shipments from Canada did not have the fungicide, the FDA said. It will release the shipments into the U.S. market as soon as the results are finalized. Canada makes up less than 1 percent of U.S. imports.
It said more testing results could be released at the end of the week, offering hope for a potentially quick resolution to a scare that briefly sent orange juice futures record high and threatened to roil an industry that depends on Brazilian imports for more than 10 percent of U.S. supplies.
"We've got 30 more samples pending, and those come from Canada, Mexico and Brazil," said FDA spokeswoman Siobhan DeLancey, adding that the testing takes about 5 to 10 business days. "I'm not sure what is where in the pipeline."
The FDA initially started testing orange juice on January 4, after a juice company informed it about traces of carbendazim found in orange juice from Brazil.
Although carbendazim has been used in Brazil for more than 20 years and is not considered harmful in doses that are even 100 times larger than what has been found in the United States, the threat of an import ban spooked juice traders in New York, sending prices soaring 11 percent to a record on Tuesday.
Those price gains were erased on Wednesday as traders guessed fears of an import ban on Brazilian juice were overblown, partly after the FDA said it would still allow imports with trace doses of less than 10 parts per billion. The European Union allows imports with up to 200 ppb.
The company, which the FDA declined to name, had always tested its own and competitors' juice for the fungicide, but only noticed increased levels recently, the FDA said.
Higher levels could be caused by greater use of the fungicide in Brazil, the agency said. The world's top exporter of orange juice uses carbendazim to fight blossom blight and black spot, a type of mold that grows on orange trees.
Brazil's citrus producers' association said on Wednesday black spot has always been a problem for its orange crop but has expanded to worrying levels in recent years.
Brands such as Tropicana, from PepsiCo Inc, and Minute Maid, from Coca-Cola Co, may use a mix of juices sourced from Brazil and the United States.
(Reporting by Anna Yukhananov in Washington, additional reporting by Peter Murphy in Brasilia; editing by Jim Marshall and Bob Burgdorfer)