December 18, 2012

China quarantines Argentinean corn due to unapproved GM strains

Two containers holding corn from Argentina were quarantined by the Chinese authorities after detecting genetically modified strains that had not been approved beforehand.

China imported 4.56 million tonnes of corn in first 10 months of 2012, with 99% coming from the US, the largest corn exporter in the world. An unidentified Chinese government official said they had bought the small volume as a test, and as of yet imports coming from Argentina have not been successful.

Chinese corn imports are expected to fall by more than half next year due to high US prices, and a rise in overall consumption will put domestic supplies under more pressure despite another record harvest, according to an official forecast on Wednesday (Dec 12).

The China National Grain and Oils Information Centre (CNGOIC) said imports by the world's second largest corn consuming nation are expected to fall to 2.4 million tonnes in the 12 months ending in September 2013, down 54% on-year, after a drought-driven price surge caused a halt in purchases from the US.

Meanwhile, consumption was expected to rise 9.6% to 205.6 million tonnes as a result of an expansion in hog herds. China's domestic corn harvest rose 8% this year to a record 208.13 million tonnes. CNGOIC said China was unlikely to import any corn at all until April 2013, depending on domestic and overseas prices.

The worst drought in decades in the US, the world's top exporter, has driven up US corn prices, which are around 4% higher than domestic corn prices quoted in the southern city of Shenzhen.

Domestic corn prices weakened after the record harvest, and corn processors have kept production relatively low as a result of poor sales of downstream products such as starch and alcohol.

China has imported corn from Argentina and Ukraine on a trial basis during the year, CNGOIC said. A Chinese feed mill in the northern province of Shandong has bought 48 tonnes of Argentinean corn.