China corn imports ‘unlikely’ to rise, despite end to GM dispute

January 23rd, 2015

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Category: Grains, Oilseeds

corn 450x299(Agrimoney) –  China’s corn imports look “unlikely” to increase despite officials last month removing a large obstacle to trade in approving Syngenta genetically modified variety which had prompted cargo rejections.

US grain exporters have welcomed China’s decision last month to approve imports containing Syngenta’s MIR 162 trait, which was at the centre of a trade storm which turned off the tap on US corn exports to China.

While Washington approved the variety, marketed as Agrisure Viptera, for cultivation five years ago, Beijing authority’s failure to follow suit resulted in Chinese rejections of US corn cargos over claims of containing MIR 162, refusals which landed  merchants with hefty losses.

The US Grains Council welcomed China’s approval of MIR 162 as “positive”, if “incomplete”, step “towards the objective of normalising agriculture trade with China”.

Quota curbs

However, the approval of MIR 162 does not mean that the floodgates will open on Chinese imports of US corn, the International Grains Council said.

Private imports are suffering “some difficulties” in obtaining import quotas, the council said, noting reports that China has linked the issuance of quota to purchases at state auctions.

“Most notably, [import] licences will only be awarded to private processors which purchase stockpiled reserves at government auctions,” the council said, noting that quotas “will only be allocated after the mills have received the auctioned grain”.

New variety, new problem?

Furthermore, another, Syngenta, corn variety – Agrisure Duracade – has emerged as another potential cause of rejected cargos, being grown in the US, but not having yet received approval from Chinese authorities.

“Traders remain nervous about the potential for future problems,” the council said.

“In particular, concerns are centred on Agrisure Duracade, a genetically modified variety harvested for the first time in the US in 2014-15, but not yet approved for import into China.”

‘Significant monetary damages’

Syngenta is still fighting an array of lawsuits linked to MIR 162, with some farmers claiming that the launch of the variety without Bejing approval “remarkably lowered the market demand for U.S. corn in China, ultimately diminishing its global price.

“As a result, this caused significant monetary damages for numerous corn exporters in the US,” one legal filing said.

Another lawsuit representing corn producers and exporters said that litigations against Syngenta “raises the critical public-policy question of when an agricultural-biotechnology company can responsibly release into the stream of commerce a new genetically-modified seed”.

“Syngenta`s decision to release its Viptera seed before China and other US trade partners approved the seed for import was unreasonable.”

Fate of DDGs

The curbs on MIR 162 also curtailed Chinese imports of distillers’ grains, DDGs, a corn-based feed ingredient.

Traders “have reported a pickup in DDG buying” by China since MIR 162’s approval there.

However, volumes are being limited somewhat by financing measures, over fears of cargo rejections.

“Some companies require advance payments to protect against possible customs rejections,” the IGC said.

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