China cancels U.S. corn purchases as GMO dispute drags on
CHICAGO Feb 6 (Reuters) - Chinese importers canceled purchases of four cargoes of U.S. corn this week, after one cargo was diverted to Vietnam last week, U.S. government data showed on Thursday, as a dispute over an unapproved genetically modified strain remained unresolved.
The U.S. Department of Agriculture confirmed, via its daily reporting system, the cancellation of 220,000 tonnes of corn by China for shipment in the current marketing year.
In a weekly export sales report on Thursday, USDA said 63,127 tonnes of corn that was reported shipped to China in the week ending Dec. 19 was instead bound for Vietnam. Other cargoes have been reported switched to Japan, South Korea and Spain in recent weeks.
China has rejected more than 600,000 tonnes of U.S. corn since November because the shipments contained MIR 162 corn, a GMO strain developed by Syngenta Ag that is not approved for import by China.
U.S. officials and trade groups have met with Chinese officials to try to speed the approval process, but the matter is likely to remain unresolved until at least the spring.
"Exporters don't anticipate that this GMO issue is going to be resolved anytime soon. They could try to deliver on the contracts, but it could be senseless given the risk of rejection because it can be costly to sell it out at a discount," said Shawn McCambridge, analyst with Prudential Bache.
"I would expect to see some more (cancellations) going forward. Unless something changes very quickly, I don't anticipate that we'll see any additional shipments being made this year."
Nearly 1.8 million tonnes in corn sold to China for 2013/14 delivery remains unshipped as of Jan. 30, according to USDA data. Also, a portion of the nearly 4.8 million tonnes in sales to "unknown destinations" was also believed to have been earmarked for China.
But while demand from China has declined, other buyers have accelerated their U.S. corn purchases as prices remain near a recent 3-1/2 year low.
Net U.S. corn export sales have far exceeded expectations in each of the past two weeks. Top importer Japan has been a particularly active buyer, booking almost 1.6 million tonnes during that time.
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