August 7, 2009

Spain has stopped a cargo of US soymeal that was found to contain traces of unauthorised genetically modified corn, trade sources said, prompting concerns over supplies of a key ingredient in animal feed.

 

Officials at import-dependent Spain's largest port, Tarragona, were not available for comment. However, sources said 50,000 tonnes of soymeal had been unloaded but could not leave the northeastern port.

 

A port source said the cargo should be dispatched. The source also revealed that they will be awaiting a meeting by the European Commission in September because of similar problems that occurred in Germany.

 

An Agriculture Ministry official confirmed authorities had blocked a shipment of soymeal, but no details were provided.

 

One source said another cargo of soymeal in northeastern port La Coruna awaited tests for genetically modified organisms. Port officials declined to comment.

 

Spain's feed industry consumes some 5 million tonnes of protein-rich soymeal a year, all of it imported, and mostly from the United States, Brazil or Argentina.

 

Traders said delays in ports and uncertainy over whether soya shipments could be dispatched threatened to produce bottlenecks in supply of the already pricey product.

 

Soymeal was quoted at 318-334 euros (US$457.30 to US$480.30) a tonne, ex-store, in Tarragona.

 

A spokesman for the Spanish Assocation of Cereal and Products Importers (AECEC) said EU doesn't allow marginal amounts and traces of GMOs not authorised by the region.

 

That puts us all in an uncertain, risky trade situation, and that is most serious for the entire European Community -- trade, livestock production and the economy, the spokesman said.

 

A trade source estimated Spanish ports had enough soymeal in stock to supply the animal feed industry for about one month.

 

The source said it will be a problem which could have an impact on prices if it is not solved in the next few months.

 

A port source said that Spain could not rely on supplies of soy from Argentina and Brazil alone.

 

Argentina will no longer have soy as of October, Brazil is in a similar situation, and with China buying 2 million tonnes, soy will become a luxury good, he said.

 

A report from Spain's Mercolleida grain exchange said that news of China buying large amounts of soy meal had added to jitters over a poor harvest.

 

With a market looking at tight carryover stocks like the sword of Damocles, this purchase is the bullish icing on the cake, it said.