| CHICAGO, April 16
CHICAGO, April 16 China's rejections of a banned
variety of genetically modified U.S. corn have cost the U.S.
agriculture industry up to $2.9 billion, a grain group said on
Wednesday in the first estimate on losses from the trade
The National Grain and Feed Association (NGFA) estimated in
a report that rejections of shipments containing Syngenta AG's
Agrisure Viptera corn resulted in losses of at least
$1 billion, based on an economic analysis that included data
supplied by top global grain exporters.
China, the world's third-biggest corn buyer, in November
began rejecting corn containing Viptera, known as MIR 162, after
previously accepting the grain. The variety, which has been
cleared by the United States and other importers, has been
awaiting approval by Beijing for four years.
"It obviously is a significant cost when you add up the
producer losses and the cost to exporters and others in the
value chain," NGFA President Randy Gordon said about the
rejections in a telephone interview.
The NGFA and North America Export Grain Association
unsuccessfully lobbied Syngenta to halt sales of corn seed
containing MIR 162 and another unapproved variety called
Syngenta did not immediately respond to questions about
Since mid-November, China has turned away 1.45 million
metric tons of U.S. corn because of the presence of MIR 162,
topping a Chinese government estimate of 908,800 tons, according
to NGFA. The corn was diverted to other buyers, who "almost
assuredly would have negotiated a discount," the report said.
Costs to U.S. corn exporters like Cargill Inc and
Archer Daniels Midland Co total an estimated $225
million, not the estimated $427 million reported last week by
the Wall Street Journal, according to NGFA.
Cargill, the top exporter of U.S. grains, last week said
rejections of U.S. corn shipments by China contributed to a 28
percent drop in earnings for the quarter ended Feb.
The rejections have depressed U.S. corn prices by an
estimated 11 cents per bushel, accounting for projected losses
of $1.14 billion for U.S. corn farmers for the last nine months
of the marketing year that ends on Aug. 31, according to NGFA.
It is unknown whether China will approve the trait before the
marketing year ends.
Karl Setzer, grain solutions team leader for MaxYield
Cooperative in Iowa, said he had heard estimates that China's
rejections had reduced U.S. corn prices by 10 cents to 20 cents
per bushel. He expects more shipments to be turned away because
China has an ample supply of corn.
"How do you put a dollar figure on it?" he said. "I expect
everything they have with us to be washed out."
Potential losses from trade disruptions for the next
marketing year, which begins on Sept. 1, could range from $1.2
billion to $3.4 billion due to the introduction of Agrisure
Duracade into the supply chain, according to NGFA. Duracade will
be planted in the United States for the first time this spring.
(Editing by Eric Walsh)