GM issues may delay new US corn imports to China

 

 

Newly-revived US corn sales to China may face import delays due to the inevitable presence of genetically-modified (GM) grain, although Wednesday's sales to state-owned trader COFCO is expected to be allowed entry without issue.

 

Markets have been abuzz in recent weeks as China made its first purchases of US corn in four years and traders have been anxiously awaiting news of further deals.

 

China requires safety certificates for GM grain so private buyers may face import problems if future shipments contain new, unapproved GM organisms, which are introduced by seed companies every season.

 

However, any safety issues would likely be resolved more swiftly than in the past after lessons learned from years of soy shipments, which have included GM material, said Thomas Dorr, president and CEO of the US Grains Council (USGC).

 

China, which has not imported US corn in four years, has purchased at least eight cargoes, or up to 445,000 tonnes, from the US over the past two weeks, including six cargoes this week by state-owned trader COFCO.

 

It was unclear whether the latest sales included any GM restrictions or not, but the purchase by state-owned COFCO implied that all needed government permits were already likely in place.

 

US traders and analysts on Wednesday (May 13) estimated that China could import 700,000 tonnes to as much as six million tonnes of US corn in the current and upcoming marketing years.

 

A significant portion of the US corn crop is grown from GM seeds, which provide farmers traits such as pest or herbicide resistance. But the GM crops have also raised concerns about food safety so buyers are often required to secure government approval for imports.

 

The USGC also said it did not anticipate that the recent sales of US corn to China would hurt exports of US dried distillers grains (DDGS), a competing animal feed that is a byproduct of corn-ethanol production.

 

US DDGS exports to China have soared in recent months as some feed producers, stung by high domestic corn costs and the inability secure corn import permits, sought less expensive alternatives.

 

A USGC official last month projected that DDGS imports by China could reach 1.2-2 million tonnes in 2010, up from 500,000-600,000 tonnes last year.