June 27, 2012

China seeks to buy Argentina's corn

China is seeking to purchase more of Argentina's corn, a senior Argentine Agriculture Ministry official said on Monday (June 25).

Argentina signed a deal with China on exports of the grain earlier this year, raising market expectations that ships laden with corn from the Pampas would soon start heading to the Asian country.

Traders and export industry sources say, however, that it is still unclear whether Argentine corn can enter the Chinese market because the accord did not cover some of the genetically modified strains produced in the South American country.

"(Wen) said during the meeting (with Argentine officials) that they're interested in buying more corn from Argentina," Oscar Solis, deputy agriculture secretary for added-value and new technologies, told Reuters without giving further details.

Wen, who is on an official visit to Argentina, signed a series of accords after meeting President Cristina Fernandez earlier on Monday.

"Corn is a kind of diplomatic commodity. The trading volume much depends on how good the bilateral relationships are," a trader said, adding that rising Chinese imports of US corn were largely aimed at helping balance bilateral trade.

Traders say that as long as Argentine farmers grow the same kind of GMO corn as US producers do, China should have no problem importing Argentine corn. China has approved 12 GMO corn strains for import.

Argentina is forecast to sell abroad 13 million tonnes of 2011/12 corn and 16 million tonnes of the 2012/13 crop, according to the USDA.

Chinese corn imports are forecast to increase to seven million tonnes in 2012/2013, due in part to rising livestock and industrial consumption, a report this month by an USDA attache in China said.