* China has been turning away corn due to unapproved GMO
* Traders say more rejections are likely
* DDG buyers trying to cancel shipments
BEIJING, Jan 6 China's quality watchdog has
turned away more corn cargoes from the United States due to the
discovery of a genetically-modified strain not approved by
Beijing and further rejections are likely, traders said.
They said that a report on Monday by the official Xinhua
news agency that China had rejected 601,000 tonnes of corn and
corn by-products from the U.S. by the end of last year suggested
that more corn cargoes had been turned away since Dec. 20, when
545,000 tonnes of the grain had been refused by the General
Administration of Quality Supervision, Inspection and Quarantine
"China's feed demand is pretty weak and we understand there
are more cargoes of this unapproved variety on the way," said
one Singapore-based grains and oilseeds trader, referring to the
MIR 162 variety developed by Syngenta AG.
"There could be more rejections and it is very bad for trade
as losses are mounting."
Xinhua, citing AQSIQ, did not give any further details on
the rejections. China has also been turning away U.S. dried
distillers grains (DDGs) and has imposed strict checks on the
"We expect more cancellations as both buyers and suppliers
are increasingly uncertain on the situation. Suppliers are not
delivering any cargoes, which bear the risk of rejection," said
one industry source, who declined to be identified.
The strict inspections triggered Chinese buyers to cancel
their largest U.S.corn purchases in 14 months last week, while
several more cargoes of the grain initially bound for China were
diverted to other Asian nations.
Chicago corn futures , which have been under pressure
from rising global supplies and China's cancellation of U.S.
cargoes, climbed half a percent on Monday, tracking gains in
Ample supplies amid weak domestic demand have pressured
Dalian corn prices , with the most-active contract
down by more than 1 percent since the first cargo was
rejected in mid-November.
China's corn harvest due in September and October 2013 was
up 5.9 percent on the year at a record high 217.7 million
tonnes, surpassing consumption seen at 197 million tonnes for
The U.S. price of DDGs has slid 20 percent in a week as
exporters shy away from selling the corn-based feed grain to its
top customers China after Beijing rejected shipments containing
China's quality watchdog issued a notice to local
authorities and asked them to increase testing of U.S. DDG
shipments after the GMO strain was detected in two batches of
shipments totalling 758 tonnes on Dec. 23, said the
administration in a statement on its website on Dec. 30
Buyers are trying to delay customs clearance while some are
trying to postpone and cancel future shipments, traders said.