February 20, 2013


Argentina, China in talks on corn exports differences



In order to resolve differences on the issue of genetically modified (GM) corn strains found in recent Argentina's corn exports, Argentina and China are in talks over the tables.

At least two containers of Argentine corn are reported to be under "quarantine." The Chinese officials said the GM strains in the corn imports from Argentina were not approved beforehand by Beijing. No further explaination details of the questionable grain were added.


Meanwhile, Argentina is keen to defuse tension over the dispute, which threatens to undermine the country's growing corn trade. Negative publicity about Argentine corn is also a source of worry for Argentine exporters who hope to profit from low corn yields in the US. Global corn prices have been inching upward, mostly in response to lower than expected US production.


China imported 4.56 million tonnes of corn in the first 10 months of 2012 but about 99% of the grain originated in the US, the largest corn exporter in the world. However, escalating prices of US corn have been a disincentive for some Chinese importers and Chinese data on imports and domestic demand remain conflicting. The data indicated China could cut back US corn imports more than 50% while considering other sources to meet rising demand from the farms.


China's domestic corn yields are also on the increase but a reported 8% rise in Chinese corn harvest compares with a 9.06% increase in projected consumption. Market analysts blame the US drought for steady increases in US export prices for corn, opening up the market for other exporters who can supply the grain cheaper.


The controversy over GM strains, however, worries Argentine exporters who have also looked elsewhere, including Ukraine, for alternative sources of corn for China's agriculture and livestock industries.


Argentina is the second largest corn exporter after the US and has suffered drought but not as widely as Australia, Russia and South Africa. A projected 20% decrease in Argentine corn output is creating a groundswell of discontent in Argentina's farm industries.


Argentina's President, Cristina Fernandez de Kirchner is facing calls from farmers' representatives for more government help and review agricultural policies that are discouraging farmers to plant corn for the 2012-13 season. Instead, many farmers are turning to production of soy, which is Argentina's main farm export.

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