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Published December 27, 2013, 03:56 PM

US corn shipments to China slow after GMO rejections

U.S. corn exports to China slowed as Beijing continued to reject cargoes containing an unapproved genetically modified strain, government data released on Friday showed.

By: Mark Weinraub, Reuters

U.S. corn exports to China slowed as Beijing continued to reject cargoes containing an unapproved genetically modified strain, government data released on Friday showed.

The U.S. Agriculture Department said that 204,600 metric tons of U.S. corn was shipped to China this week, down 17 percent from a week ago and the smallest amount since early November. The cargoes to China accounted for about 15 percent of U.S. corn shipped overseas.

China booked another 19,000 metric tons of corn for delivery during the 2013 to ’14 marketing year, less than the 124,000 metric tons booked a week ago.

Exports to China will likely continue to fall in the coming weeks, said Tom Fritz, a partner with EFG Group in Chicago, unless a deal on GMO varieties can be reached.

China’s quarantine authority refused 545,000 metric tons of U.S. corn in November and December because shipments contained Syngenta AG’s MIR 162 corn, a GMO variety that has been awaiting China’s approval for more than two years.

USDA has projected that China will import 7 million metric tons of U.S. corn in the 2013 to ’14 marketing year.

Beijing also has begun to reject U.S. dried distillers grains (DDGs), a byproduct of corn ethanol production that is used as animal feed. Xinhua News Agency reported on Friday that China’s quality watchdog confirmed the rejection of two U.S. cargoes of DDGs containing traces of MIR 162.

Exporters have been able to find buyers for the rejected corn. USDA’s report showed that Japan snapped up 41,100 metric tons of corn that was originally headed to an unknown destination, which analysts say is usually China.

South Korea’s Nonghyup Feed Inc, the country’s largest animal feed maker, rejected all offers in its tender for 70,000 metric tons of feed corn, which analysts said showed they were likely in the market for China’s rejected cargoes.

“They passed because they know there is a bunch of afloat corn that is looking for a home,” EFG’s Fritz said. “They figure, ‘I can buy it on the cheap.’”

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