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China urged to back corn at centre of trade furore

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The US Grains Council called on Beijing to approve a Syngenta genetically modified corn trait after China raised its barriers against the seed, at the centre of a trade storm, demanding "impossible" import certification.

Tom Sleight, chief executive of the council, which promotes US grain exports, said it was "time for China to look at and approve this trait", known as MIR 162, and is included in Syngenta's Viptera brand seed.

Although MIR 162 has been approved in "all importing countries, including the European Union, for quite some time", and was cleared by the US four years ago, Beijing authorities have stalled over a decision on the trait, which is claimed to offer resistance against insect pests such as earworm caterpillars.

This has led to Chinese authorities rejecting a series of cargos of imported corn, and the distillers' grains (DDGs) feed ingredient derived from the grain, for fear of containing MIR 162.

The curbs escalated this week with a demand by Chinese import inspection authority, AQSIQ, for certificates assuring that US cargos of distillers' grains are free of MIR 162 – a request the council has termed impossible to meet.

'Basically embargoed'

"China is asking for something that cannot be done. This certificate they're asking for does not exist," Mr Sleight said.

"The lack of approval of MIR 162 is becoming an undue impediment on trade."

Indeed, China's move is seen by many observers as representing, in effect, a ban on imports of US distillers' grains, a high protein feed ingredient, often used as an alternative to soymeal.

"I don't expect to see the APHIS [trade inspection] arm of the US Department of Agriculture certifying shipments of any product, especially with a 0% tolerance," Brian Henry at Benson Quinn Commodities said.

"We do not believe the USDA grain inspection service will comply," said Richard Feltes at RJ O'Brien.

At Iowa-based broker Market 1, Mike Mawdsley said that US certification, "isn't going to happen, thus Chinese authorities have basically embargoed our DDGs".

Syngenta comments

A halt to US distillers' grains exports on this route would be a significant threat, given that China had become the top buyer, overtaking Mexico in 2012, and accounting for 46% of America's foreign shipments last year.

The US-based National Grain and Feed Association in April estimated at $2.9bn the loss in2013-14 to the US corn industry from the MIR 162 trade curbs, estimated to have depressed prices of the grain by $0.11 a bushel.

The National Grain and Feed Association urged Syngenta to mothball seed containing the disputed trait until it had been approved by China.

Michael Mack, the Syngenta chief executive, said earlier this week that the group did not have approval "in hand and I wouldn't want to say any more about when we might have it in hand".

He said that "the delays coming out of China are such that people just aren't really understanding right now even what the process is".

However, there was "no technical question right now waiting from the Chinese" about the trait.

Market impact

Mr Mack said that Syngenta sales of Viptera were "principally unchanged" despite the furore, but acknowledged that they might have fared better if Chinese approval had been gained.

"Did it have an impact on our sales? I suspect it had an impact on our sales growth, yes, I do," he told investors.

"But it certainly has not had an impact that a number of people had feared when this thing came into the forefront in January."


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