Vilsack, U.S. grain trade officials head to China for talks

CHICAGO Fri Dec 13, 2013 5:22pm EST

CHICAGO Dec 13 (Reuters) - Secretary of Agriculture Tom Vilsack will lead a team of senior U.S. officials and farm industry leaders attending annual trade talks with Chinese officials next week in Beijing, with recent rejections of U.S. corn shipments to be among the topics discussed, government and industry sources said on Friday.

The United States is the world's biggest exporter of corn, which is a basic ingredient of hundreds of products from livestock feed to edible oil to starch and ethanol. China, the third biggest importer of U.S. corn, has rejected several shipments since mid-November that it says tested positive for a genetically modified corn variety not approved for import by China.

The quantities rejected remain small compared to the amount of corn China imports. But such concerns in the past have blown up into major controversies in Asian customers like South Korea and Japan, and concerns about the rejections have mounted among farmers and grain exporters, who will also be sending a delegation to Beijing next week, according to industry sources.

"The JCCT provides a meaningful and important venue to work with our Chinese counterparts on critical trade matters that will help open even more markets for U.S. exports," Vilsack said in a statement, referring to the U.S-China Joint Commission on Commerce and Trade.

Separately, members of North American Export Grain, a trade group, are also heading to Beijing, with talks to include "restoring access for U.S. corn imports by China while reducing mitigating related risks and costs to the U.S. supply chain," according to a letter sent by the National Grain and Feed Association, the largest U.S. grain handlers group, to its members on Friday.

Grain traders say that discussion will include handling and detecting Syngenta AG's seed type Agrisure Viptera, know as "MIR 162," an insect resistant GMO corn variety that is approved for import by most major global corn buyers. It has been awaiting final approval from China for more than two years.

The variety is believed to already be commingled with much of the U.S. corn supply.

At least 250,000 tonnes of U.S. corn -- four to five ocean-going vessels -- have been rejected by Chinese quarantine officials, compared with more than 3 million tonnes shipped to China from the United States this marketing season. (Reporting by Christine Stebbins; Editing by Leslie Adler)