November 19, 2013
China, one of the world's largest corn importers, has rejected a cargo of US corn as its genetically modified variety -Syngenta AG's Agrisure Viptera corn, also known as MIR 162, is not approved for import by China.
The genetically modified organisms (GMO) discovery comes at a time of surging US corn imports by China as Beijing grapples with record-high domestic corn prices and rising demand for food. For that reason, analysts say the matter will be quickly resolved.
Even so, the news weighed on the Chicago Board of Trade corn futures markets. December corn futures fell US$0.10, or 2.4%, to a three-year low at US$4.12 per .10 tonne. The US historically is the world's top supplier of corn, exporting between 10% and 20% of its harvest each year. The USDA estimates that farmers will export 10% of this year's corn crop, now estimated at a record 13.989 billion bushels.
China is the third largest corn importer after shifting from a corn exporter to a net importer in 2010, buying nearly all of its imports from the US.
China has not yet signed off on MIR 162 but is expected to approve it later this year or in 2014, according to traders. It is approved for import by other US trading partners, including Mexico, the EU and top corn importer Japan.
Agrisure Viptera, designed to offer enhanced protection against crop-damaging insects, is widely grown in the US so traces of the grain may have been commingled with approved corn strains in a shipment to China, traders said.
China already allows imports of 25 different GMO corn varieties and is considering adding other commonly cultivated varieties to the list, including Agrisure Viptera, which has been pending approval for about 18 months.
The discovery of MIR 162 in a single cargo from its top supplier was unlikely to disrupt the flow of US corn to China. A bulk corn shipment from Argentina was cleared for import earlier this year despite it containing traces of MIR 162.
China is expected to import a record-high seven million tonnes of corn in the September 2013-August 2014 marketing year, according to the USDA.
