UPDATE 2-Cargill bars Syngenta corn variety at US wet mills

Thu Sep 1, 2011 5:43pm EDT

* Cargill not taking Syngenta's GMO corn at wet mills

* Cargill awaiting regulatory approval from EU

* Bunge North America said earlier not taking the corn (Adds details on country elevators, background)

By Christine Stebbins

CHICAGO, Sept 1 (Reuters) - U.S. agribusiness giant Cargill [CARG.UL] said on Thursday it will not accept Syngenta's (SYNN.VX) genetically modified Agrisure Viptera corn at its North American wet milling plants until the corn variety receives regulatory approval from the European Union.

Another major grain handler, Bunge North America (BG.N), has also barred Agrisure Viptera from its facilities, awaiting additional export market approval, particularly from China -- a top U.S. grains and oilseed customer.

"Cargill strongly values its right to accept or restrict products of agricultural biotechnology, dependent on the approval status in export markets and needs of our customers," Cargill spokeswoman Nicole Reichert said.

"Consistent with our long-standing wet milling position, Cargill cannot accept Viptera at these facilities until it has received regulatory approvals in the EU," she said.

Cargill said its grain elevators will accept Viptera but only with written notification ahead of delivery.

U.S. agricultural processor and ethanol producer Archer Daniels Midland (ADM.N) could not immediately comment on trade reports that its facilities were not accepting Viptera corn.

U.S. processors and exporters became hypersensitive to issues related to GMO corn after a variety unapproved for food use known as Starlink was discovered in a U.S. shipment to Japan in 2000. Sales to the biggest U.S. customers at the time -- Japan and South Korea -- dried up overnight.

The subsequent tracing, sorting, testing, separating and certifying of GMO cost the industry millions of dollars.

Cargill operates eight wet-corn milling plants in North America, all in the United States, with the largest located in Blair, Nebraska. The Blair plant accepts some 100 million bushels of corn annually to produce ethanol, food products and livestock feed.

The genetically modified Viptera corn variety, designed to protect the crop against insect damage, represents less than 2 percent of the U.S. corn crop, Syngenta said.

The variety has been approved for shipment to several major corn export destinations, including Australia, Brazil, Canada, Japan, Mexico, New Zealand, the Philippines and Taiwan.

"China has not yet approved it, but we expect approval by China by the end of the first quarter next year," Syngenta spokesman Paul Minehart said.

Syngenta Seeds, a unit of the world's largest agrochemicals company, Syngenta AG, filed suit against Bunge on Aug. 22 for refusing to accept Agrisure Viptera corn.

Syngenta said it had been in contact with U.S. ethanol plants to identify "suitable outlets" for the Viptera corn.

"With tight corn supply this fall, we expect ethanol plants will have strong interest in taking corn with the Agrisure Viptera trait but we ask that growers notify destinations that their grain contains the Agrisure Viptera trait before delivery," Minehart said. (Additional reporting by Sam Nelson and Karl Plume in Chicago and Carey Gillam in Kansas City; Editing by Dale Hudson and Marguerita Choy)

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