Grain companies tighten GMO policy, eye Syngenta corn

CHICAGO Thu Sep 1, 2011 8:25pm EDT

CHICAGO (Reuters) - Major U.S. grain companies have tightened curbs on genetically modified grains not yet approved by foreign markets, with some singling out one popular corn variety made by Syngenta, fearing any trace of the biotech grain in shipments could shut off export markets.

The action was taken just weeks before the U.S. corn harvest, when this variety of corn could enter market channels.

U.S. agribusiness giant Cargill said on Thursday it will not accept Syngenta's genetically modified Agrisure Viptera corn at its North American wet milling plants until the corn variety receives regulatory approval from the European Union.

Agricultural processor Archer Daniels Midland did not single out any specific corn varieties, but said it would only accept grain approved for commercial use in the European Union, which would exclude Viptera, unless given prior written notice to ensure its supply chain integrity.

Another major grain handler, Bunge North America, 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 and ADM said their grain elevators will accept Viptera but only with written notification ahead of delivery.

"We need the advance written notice so that we can make merchandising decisions regarding the grain and so that we can ensure the integrity of our supply chain and our exports," ADM spokesman Roman Blahoski said.

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 August 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 in Chicago and Carey Gillam in Kansas City; Editing by Bob Burgdorfer)