Ag issues on agenda as China corn rejections roil market

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The United States could raise the issue of China's recent rejection of several U.S. corn cargoes at trade talks this week, an official said on Wednesday.

A full range of agricultural trade issues for the two countries is expected to be on the agenda at the high-level talks, but the corn issue has emerged as perhaps the most pressing.

Beijing has rejected as much as 600,000 tonnes of U.S.-grown corn since mid-November on the grounds they contained genetically modified grain not approved for sale in China, a private consultancy estimates. That would be more than twice the official tally of rejections.

The strain, produced by Syngenta, has U.S. approval and is approved for import by many corn-importing nations but has waited more than two years for Chinese acceptance.

The U.S. trade representative's office "is closely following this issue," a spokeswoman said. "We have raised concerns with China regarding increasing delays in the approval process for biotech events."

Known as the Joint Commission on Commerce and Trade, the annual consultations are set for Thursday and Friday. Agriculture Secretary Tom Vilsack is part of the U.S. delegation headed by Commerce Secretary Penny Pritzker and U.S. Trade Representative Michael Froman.

"At the upcoming JCCT plenary, we will be discussing the full range of U.S.-China agricultural trade issues. Our expectation is that biotech approvals will be handled in a timely and predictable manner, through a transparent, science-based process," said the USTR spokeswoman.

Before departure for Beijing, Vilsack said a subject for the talks would be a potential agreement for a pilot program to synchronize U.S. and Chinese regulatory review of new biotech crop varieties. At present, China does not begin its reviews until U.S. approval is received.

"We think we can at least start them simultaneously," Vilsack told USDA's radio news service. "We think we can speed that process up."

Vilsack said there were "serious issues with the biotechnology and the slow progress in approving biotechnology events that are now causing significant concern in the market because recent shipments of corn have been deferred or delayed."

China rocketed into a top U.S. farm export market in recent years. After three years as the No. 1 customer, it is forecast to buy $21.5 billion worth of U.S. ag goods this fiscal year, a close second behind Canada. China is the fifth-largest corn importer in the world and the leader in cotton and soybean imports.

The high-level, JCCT talks are the culmination of a year of activity by working groups on issues such as medicines, computers, agriculture and intellectual property rights.

The rejection of cargoes has roiled the corn futures market, although China continues to buy U.S. corn in large volumes.

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