Argentina sends GMO corn to China, but will it get in?

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Argentina has sent its first major cargo of genetically modified (GMO) corn to China, where demand for grain-based animal feeds is growing as the country's emerging middle class adds more meat to their diet, Argentina's corn chamber said on Thursday.

The South American country is the world's No. 3 corn exporter. But by last Sunday, when the shipment left the Southern Atlantic port of Bahia Blanca, it had never sent a major cargo of GMO corn to China for fear of rejection at port.

"It was a full shipment of 60,000 tonnes. It's on its way," said Martin Fraguio, executive director of Argentina's corn industry chamber Maizar.

Most Argentine corn is genetically modified. A small amount was allowed into China late last year as a test case under a China-Argentina GMO deal signed in February 2012. Maizar and the Argentine government say they expect the 60,000 cargo to be accepted as well, under the pact.

There is broad scientific consensus that food on the market derived from genetically modified crops pose no greater risk than conventional food. However, advocacy groups argue that the risks of GMO food have not been adequately identified and controversy still surrounds genetically modified wheat.

While the United States has embraced genetically modified crops such as soybeans and cotton, genetically modified wheat has never been approved in the United States, or anywhere else in the world. Last week genetically modified wheat was found growing in Oregon and South Korea and Japan suspended some U.S. wheat purchases as a result.

However, with more money in their pockets thanks to an economy that has expanded dramatically over the last decade, millions of Chinese are seeking a richer diet including more pork, poultry and beef, all of which require grain-based feeds.

The corn cargo was confirmed by Argentina-based traders familiar with the transaction. But the champagne corks will not be popped until the ship, called Ocean Pride, is docked in China and the corn approved by Chinese port authorities.

"Even in sending corn to a traditional market like the European Union, you never know whether it will get through customs until it's there because at the last minute they might find an insect or weed that blocks entry," Fraguio added.

"It's not only biotechnology that can cause difficulty. This is part of the risk involved in the grains exporting business."

Argentine traders not involved in the deal are watching to see what problems the cargo might have getting into China.

"This is a major development, if everything goes well," said one trader at a major export firm, who spoke anonymously.

China is expected to be the second-largest corn producer in the world during the current crop season with the U.S. Department of Agriculture (USDA) projecting the country's output at 212 million tonnes, over 20 percent of the world's crop and behind only the United States, forecast at 359 million tonnes.

But China is expected to import another 7.0 million tonnes to supply its growing livestock producing business, putting it behind top importers South Korea and Japan, according to the USDA. Currently the U.S. is the biggest exporter of corn to China.

"We do not expect any more corn to go (from Argentina) to China until the 2013/14 harvest begins because what's left of the current crop will be more expensive and China will find corn from the United States cheaper to buy," said another Buenos Aires-based trader who asked not to be named.

Argentine farmers are finishing the 2012/13 corn harvest, which started in March and could extend to August.

"We expect to see more shipments of Argentine corn to China from March 2014 onward," the trader said.

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