May 8, 2006

Experiment to import US corn hits snag in China

China's Shenzhen Hualian Grains and Oils Trading Co said on Monday (May 8) it was still awaiting a permit from Beijing's quarantine authority to unload a shipment of US corn designed as a prelude to see where potential problems could occur in the arcane Chinese import system.

The shipment consist of 100 tonnes of GM corn imported from the US. The purchase was seen as a litmus test to see whether the Chinese government would allow more of such imports and where along the system potential problems might arise.

A representative from Hualian said it needed a permit from Beijing in addition to approval from Guangdong's provincial quarantine authority.

The company is not anticipating problems as the shipment has been approved by the local quarantine bureau, the official said. The corn was bought on behalf of a local feed mill which has import quotas.

He said the containers had arrived in Hong Kong and would stay there for several days before being transported to Huangpu port in the province.

Traders and industry officials have said China, a major exporter of corn only a few years ago, might turn into a net importer next year due to skyrocketing demand.

A senior trader at an international grain-trading house said the market is watching developments closely as it would be the first time such an import would come to China.

An approval would pave the way for future shipments, said the trader.

Dealers said another Chinese buyer had booked 100 tonnes of US corn to be shipped if the first US corn shipment cleared the quarantine.