Syngenta AG said on Monday it had halted commercial sales in Canada of corn seed containing a new genetically modified trait because major importers had not approved the product.

Syngenta pulled from the Canadian market seed containing the Agrisure Duracade trait, which was available for planting for the first time this year, according to a Syngenta notice that was sent to seed dealers and obtained by Reuters.

The trait has been approved for cultivation in Canada and the United States and for import by some overseas buyers, including Japan, Mexico and South Korea. It has not been approved for import by China or the European Union, two major international markets.

"While the vast majority of the Canadian corn crop is typically directed to domestic markets in North America, some corn may be destined for these markets," Syngenta said in the notice, referring to China and the EU. "Accordingly, we want to ensure the acceptance of any trait technology grown in Canada meets end-market destination requirements."

Any seed containing Duracade that has been shipped to retailers in Canada "cannot be sold and arrangements for immediate returns will be made," the notice said.

A spokesman for Syngenta, the world's largest crop chemicals company, confirmed the company will not sell seed containing Duracade in Canada in 2014.

Exporters and some farmers applauded the decision because they had worried the presence of the unapproved trait in Canada's grain supply could disrupt trade.

However, it was little comfort for U.S. farmers and grain handlers who still fear that China or Europe will reject shipments of U.S. grain if they find traces of Duracade corn. It can be difficult to segregate different varieties of corn from one another because they are often harvested, transported and stored together.

Grain trader Gavilon has agreed to market Duracade crops in the United States as part of a deal with Syngenta. Top merchants Archer Daniels Midland Co, Bunge Ltd and Cargill Inc have said they will limit their handling of crops containing the trait because it is not approved by major importers.

Peter Entz, assistant vice president of seed and traits at Richardson International Ltd, one of Canada's biggest grain handlers, said he was "elated" to hear Syngenta would not sell Duracade in Canada this spring. Richardson ships large volumes of corn to Europe, he said.

"These are significant trade issues at the end of the day and very costly ones, so we applaud Syngenta's position in Canada," he said.

Some farmers who had planned to plant Duracade in Canada will switch to other Syngenta hybrids, while others will cancel their orders in favor of products from different companies, said Brandon Yott, product development and marketing specialist for The Agromart Group. Agromart, which buys seed from Syngenta and sells it to retailers in eastern Canada, learned in a telephone call with Syngenta on Monday that Duracade sales would not proceed in the country, he said.

"Syngenta's in a quagmire where they have seed that's been produced and a market that's almost ready, and they are pulling that back for a variety of reasons," he said.

"To have that not in the market because of other countries that are dithering, I think it's frustrating for everybody."

Duracade is engineered to fight rootworms, pests that can reduce harvests and cost farmers millions of dollars in pesticide expenses and lost revenue.

Since November, Chinese authorities have rejected more than 600,000 tonnes of U.S. corn and corn products containing another unauthorized genetically modified Syngenta corn trait, Agrisure Viptera. Known as MIR 162, the trait has been awaiting Beijing's approval for more than two years.