China GMO Corn Controversy Roils the Markets

Turning down shipments of DDGs due to detection of what the country claims is an unapproved trait has analysts pondering many issues.

Published on: Dec 27, 2013

Anytime a trading partner turns away a shipment of products it causes a stir. The reported refusal by China to take delivery of dried distillers grains - DDGs - since November due to claims that the loads contained a biotech trait unapproved in the country is causing problems.

There are a range of theories being circulated about the impact of the move - including a potential boost in soybean meal sales as the country seeks to find a protein substitute for lost DDGs availability.

The trait in question is a Syngenta Viptera trait the Chinese claim isn't labeled for use in the country.

SAYING NO: China is inspecting more loads of corn-based DDGs after finding a non-approved trait in early November.
SAYING 'NO': China is inspecting more loads of corn-based DDGs after finding a non-approved trait in early November.

Another bit of fallout over the controversy is rising scrutiny of crop imports into China due to worries over unlabeled content. Note, the trait in question has been approved for sale in Canada and Europe, this hiccup is over approvals in China.

Yet the pushback on the issue hasn't hindered the market with corn prices staying over $4. Sister publication Corn+Soybean Digest reports the changing export picture in China hasn't dampened corn prices with the crop still bringing in more than $4/bushel.

And Businessweek reports that government officials in China may be pushing more inspections in light of the discovery of the new-tech corn. In the report, Businessweek says that as of Dec. 19, China had rejected 12 loads of corn totaling 545,000 metric tons. The trait in question has yet to receive a safety certificate in China.

Reuters is reporting that more rejections may be possible as officials continue to look into the matter. Chinese imports of corn are on the rise, but this new wrinkle could cause a slowdown. Quarantine authorities have been alerted to test more corn for presence of the trait.