By Dow Jones Business News,
December 19, 2013, 11:15:00 PM EDT
BEIJING--China has blocked an unprecedented amount of U.S. corn imports this year for violating its ban on certain
types of genetically modified food, illustrating the difficulty big biotechnology companies face in tapping the
country's potentially vast market.
Market watchers said the refusals are a result of stepped-up vigilance by Chinese authorities--made easier to
implement thanks to a healthy increase in domestic corn supplies this year.
China's quality watchdog said Friday that it has repatriated 545,000 metric tons of U.S. corn so far this year in
cargoes that contained MIR162, an insect-resistant strain of the grain that is permitted in the U.S., Japan and Europe
but not approved by China's agriculture ministry.
China's agriculture ministry said it is still evaluating MIR162.
China imported about 1.5 million tons of corn from the U.S. in the first 10 months of this year, according to customs
At a press conference on Friday related to U.S.-China trade negotiations, Vice Agriculture Minister Niu Dun said the
corn was rejected "because safety assessment procedures for export of GMO corn weren't completed."
Also speaking at the bilateral Joint Commission on Commerce and Trade in Beijing, U.S. Trade Representative Michael
Froman said U.S. Agriculture Secretary Thomas Vilsack had discussed the rejected shipments with his Chinese
counterparts. Mr. Froman called the matter an "area of continuing work," but didn't say whether any progress had been
made. Mr. Vilsack wasn't immediately available for comment.
Swiss biotechnology company Syngenta AG, which makes MIR162, called on China Friday to update its laws to allow the
strain. "The solution is with the Chinese authorities," a spokeswoman said. "If they want to import corn from the major
corn-producing areas of the world, they should synchronize their regulatory process so that they can accept the corn
being grown in those regions."
While the U.S. and Europe widely accept genetically modified grains, China bans them for human consumption, saying
they are still in the final stages of testing whether such food is safe for commercial distribution. Seed manufacturers
have complained that the opaque approval process disrupts markets for global growers and traders. Beijing allows some
transgenic corn strains to be imported for use as animal feed.
Increasing demand has propelled China from being a net corn exporter to the world's fifth-largest buyer.
Analysts say this year's rejected cargoes add up to a record-high volume of grain turned away. No corn shipments were
rejected last year, and only a negligible amount was sent away over the past three years, said Zhang Yan, an analyst
with the consulting firm Shanghai JC Intelligence Co. Before 2010, China bought only small and sporadic shipments of
foreign corn, Ms. Zhang said
The tainted corn was found in 12 batches of U.S. shipments sent to ports in at least six Chinese provinces, China'sGeneral Administration of Quality Supervision, Inspection and Quarantine said. The agency said its quarantine bureaus
have notified U.S. authorities and urged the U.S. to "improve its inspection procedures."
Traders worry the rejections may herald a slowdown in demand for exports to China. Chinese importers had lined up
three million tons of U.S. corn imports by summer this year, the U.S. Department of Agriculture said in August. However,
an ample harvest in China may have blunted the country's need for the imports.
State grain researchers say China's corn harvest this year of an estimated 215 million tons was likely a 5% increase
compared with 2012, though the government hasn't disclosed the exact volume. Official data say China's total grain
harvest, which includes corn, is up 2% on year.
"A more realistic factor to consider is that domestic corn supply has been quite high lately, so there isn't quite as
much a need for foreign supply," said Rabobank analyst Pan Chenjun.
Senior government officials have warned that the country may face a rising corn supply deficit in coming years due to
increasing demand from food-processing industries. In recent months, the agriculture ministry has defended a trend of
rising corn imports by arguing in a series of public statements that using a combination of domestic and foreign
resources is "an inevitable choice for China."
With U.S. shipments currently accounting for 94% of China's corn imports, it is moving to diversify. In recent months,
it has made corn-import deals with Argentina and Brazil, including approved approval of genetically modified strains for
Some military strategists have warned that Western nations could use genetically modified organisms as a strategy to
undermine China's food security.
Write to Chuin-Wei Yap at firstname.lastname@example.org
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