Bunge Ltd, one of the world's top grain traders, signaled last week that it will refuse to handle corn containing a new genetically modified Syngenta AG trait unless it is cleared by China.
"We handle crops that have been approved in major markets," Chief Executive Officer Soren Schroder told Reuters. "That is our stand."
Grain merchants must decide whether to buy corn from farmers that contains Syngenta's Agrisure Duracade strain because seed containing the trait is available for planting in the United States for the first time this year.
The trait, engineered to fight damaging pests called rootworms, won U.S. approval for planting and cultivation in 2013 but has not yet been approved by China or the European Union.
Schroder said he did not believe Bunge had made a decision yet on whether it will handle corn containing Duracade. Seeds containing the trait will be planted this spring and harvested for the first time in autumn, leaving major importers some time to clear the product.
China, which accounted for almost 14 percent of U.S. corn exports in 2011/12, constitutes a major market, Schroder said.
A debate over the commercialization of Duracade has split the U.S. farm industry since China in November began rejecting U.S. corn containing another unauthorized GMO Syngenta corn trait, Agrisure Viptera. Some growers argue they need access to new technologies, while exporters warn the introduction of Duracade raises the risk for further trade disruptions.
Known as MIR 162, the Viptera trait has been awaiting Beijing's acceptance for more than two years.
Bunge does not accept MIR 162 at its facilities and the recent Chinese rejections have not had a material impact on the company, Schroder said in an interview. He declined to say whether Bunge had been successful in keeping MIR 162 out of its shipments.
Grain merchants would need to test every load of corn that arrives at their elevators to ensure an unapproved strain did not enter their supply, a time-consuming and costly task.
The National Grain and Feed Association and North American Export Grain Association wrote to Syngenta last month, asking it to suspend the commercial use of Duracade and MIR 162 in the United States until China and other U.S. export markets have granted regulatory approval.
Syngenta has declined, saying growers need access to new technologies and that importing countries need to align their regulatory processes. Duracade has import approval from major buyers, including Mexico, South Korea and Japan.
"We agree with the trade organizations' statement that a coordinated approval process is the right way to go," Schroder said. "I think that is in the best interest of all involved, including the technology providers."
Archer Daniels Midland Co, another major grain trader, last week said it had only suffered a small impact from Chinese rejections of U.S. corn cargoes.
Still, ADM has contacted to farmers to encourage them to understand how their seed selection will impact their marketing opportunities after the autumn harvest, Chief Operating Officer Juan Luciano told analysts during an earnings call.
"Certainly, it's not business as usual any more," he said.
In 2011, Bunge North America, a unit of Bunge, refused to accept MIR 162 because it had not been approved by major export destinations. Syngenta filed a lawsuit challenging Bunge's move and largely lost the case.
Syngenta, the world's largest crop chemicals company, has said it commercializes corn traits in line with industry practices, once it has approval from countries with "functioning regulatory systems." The company has already "sold out" of its limited quantities of corn seed containing Duracade. (Additional reporting by Karl Plume in Chicago; Editing by Marguerita Choy)