China rejects more U.S. GMO corn as state sales approach

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China has turned away more U.S. corn after detecting an unapproved genetically-modified strain in shipments, with buyers waiting for sales from the country's huge state reserves or shifting to cheap grain from Ukraine.

China's quality watchdog in the northern city of Tianjin turned away 21,800 tonnes of U.S. corn after detecting MIR 162, a GMO strain developed by Syngenta AG that Beijing has not approved for import, the official Xinhua news agency reported late on Monday.

That brings the total amount of corn that China has rejected from the United States, the world's largest exporter, to 908,800 tonnes since November.

A decline in China's appetite for corn imports could cap gains in benchmark U.S. corn futures that have climbed almost 16 percent this year.

"The industry is not optimistic over imports from the United States. Resolution of the GMO issue could drag on until the second half of the year," said an industry analyst with an official think-tank in Beijing.

China's Biosafety Committee will meet this week or next to decide if MIR 162, designed to offer enhanced protection against crop-damaging insects, should be approved. If no decision is made, the next review would be in June.

The rejections since November have raised speculation that the ban is being strictly enforced to prevent cheap imports in a well-supplied market, but China's quarantine bureau has said it has been consistent in its checks on genetically-modified farm products and applying rules.

China holds more than 90 million tonnes of corn in state stockpiles, with the market expecting it to sell some grain as early as May.

Firms that have quotas for low-tariff imports are shifting to Ukraine and Thailand for supplies, analysts said.

China's imports of non-GMO corn from Ukraine surged to 192,374 tonnes in February, bringing the country's total imports in the month to 479,758 tonnes, up around 22 percent on the year, according to official customs data.

The China National Grain and Oils Information Center (CNGOIC) estimated total imports from Ukraine in the whole year could hit 800,000 tonnes.

China also imported a 77,936-tonne corn cargo from Thailand in February.

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