January 8, 2014

"The situation seems to have improved these days and inspection turns regular," JCI said. "Last week, there were 20-25% of imported DDGs passing the customs inspection and the passing rate has increased to 40-50% this week," said the Shanghai-based analyst firm, widely followed by the US grain trade for China market trends.

"Market insiders expect the customs clearance rate will further rise to 60%-70% next week," JCI said.

After samples in the cargoes were found to contain traces of Syngenta's AG's MIR 162 corn, a GMO variety which has been waiting China's official approval for more than two years, Beijing has rejected about 2,000 tonnes of US-produced DDGs as well as 600,000 tonnes of US corn shipments since November 2013.

A signal that China's grain inspections approvals were improving came on Monday (Jan 6) when the price of US DDG - a high protein feed which competes with soymeal in livestock rations - jumped US$10 per tonne or 5% or more, at export markets, rebounding from steep declines which occurred during December in nervous reaction to China's posture.

Traders said that the December price drops of up to 20% in DDGs had spurred fresh domestic and export interest, including from China. Barges of DDG shipped in the first three months of the year on the Mississippi River continued to rise, bid at US$205 per tonne, up from US$180 last week but down from US$275 in early December, traders said.

JCI also reported that the Chinese grain inspection authorities in Guangdong and Shanghai are meeting with industry participants this week to discuss the inspection process.