China rejects U.S. corn cargo due to unapproved GMO variety
Chinese feed mills have been aggressively buying U.S. corn since October to benefit from cheap prices due to a record U.S. harvest.
Domestic prices have typically been more than 20 percent higher than U.S corn this year as the government raised the price it pays for corn as part of its stockpiling system to support farmers.
China is expected to import a record 7 million tonnes of corn in the 2013/14 (Sept/Aug) marketing year, up from 5.23 million tonnes the previous year, according to the U.S. Department of Agriculture (USDA).
China is the world's No.3 corn importer after shifting from corn exports to net imports in 2010, with nearly all buying from the U.S.
"We do not think the rejected cargo has anything to do with the government looking to curb imports. China's overall strategy is to increase imports and it has to give the right signals to the world market," said an analyst with an official think-tank in Beijing.
"China's own production is unlikely to grow every year and its current large stocks are only temporary."
Agrisure Viptera, designed to offer enhanced protection against crop-damaging insects, is widely grown in the U.S. so traces of the grain may have been commingled with approved corn strains in a shipment to China, traders said.
"Syngenta is not aware of any such incident," said Paul Minehart, head of Corporate Communications-North America for Syngenta Corporation.
China already allows imports of 25 different GMO corn varieties and is considering adding other commonly cultivated varieties to the list, including Agrisure Viptera, which has been pending approval for about 18 months. It is expected to get the green light later this year or in 2014, according to traders.
A bulk corn shipment from Argentina was cleared for import earlier this year despite it containing traces of MIR 162.
The U.S. historically is the world's top supplier of corn, exporting between 10 and 20 percent of its harvest each year.
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