China set to bar more U.S. corn as GM ban drags on
But the rejections come as corn prices on China's Dalian Futures Exchange have fallen more than 14 percent since the domestic harvest started in September.
About 2 million tonnes of U.S. corn, already booked by Chinese buyers, have not been loaded and may be cancelled, said a source at an official think-tank, declining to be named.
Scrutiny over the strain has also led to rejections of U.S. distiller grains (DDGs), a corn-based feed grain.
Some large feed mills met quarantine bureau officials in Beijing last week to urge them that DDG should be exempted since it is a feed ingredient. Officials responded coolly to their calls, said a source with direct knowledge of the issue.
Along with plentiful corn supplies, China is also facing sluggish demand after animal feed demand dropped last year for the first time in decades when meat consumption was hit by bird flu outbreaks and food scandals.
The U.S. Department of Agriculture (USDA) has cut its forecasts for China's imports to 5 million tonnes from 7 million tonnes in the crop year ending in August 2014. China imports corn almost all from the United States.
While China is unlikely to issue corn import quotas to state-owned firms for 2014, private mills with 2.88 million tonnes of quotas could turn to Ukraine, traders said.
China imported non-GMO corn from Ukraine for the first time in December, buying 108,866 tonnes.
China's state stockpiler, Sinograin, has stepped up purchases from farmers in the northeast and is expected to have built up 30 million tonnes by the end of January, analysts said.
Sinograin's purchases could top 40 million tonnes by the end of April, bringing total state stocks to more than 70 million tonnes, larger than the combined output of the European Union.
"The lifting of the GMO restriction will depend on domestic corn prices and the supply situation. We will have to wait and see after the government ends its stockpiling at the end of April," said one trading executive at a domestic trading house.
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