CHICAGO (Reuters) - A second company has sued Syngenta AG over sales of genetically modified corn seed not approved by China, raising the stakes for the Swiss-based seed maker by including byproducts used for animal feed in its complaint and seeking class-action status.
Trans Coastal Supply Co, a major exporter of livestock feed products, said in court documents it expects to lose more than $41 million because Syngenta sold Agrisure Viptera corn seed, known as MIR 162, to U.S. farmers without first obtaining import approval from Beijing.
On Friday, international trader Cargill Inc [CARG.UL] charged in a lawsuit that Syngenta exposed the agribusiness company to more than $90 million in losses by selling the trait in corn seed without China’s approval for imports.
China, a major buyer of U.S. grains, has rejected boatloads of U.S. crops containing the variety over the past year.
The majority of Illinois-based Trans Coastal’s losses are related to exports of an ethanol byproduct called distillers dried grains (DDGs), used in livestock feed, according to court documents filed on Friday in federal court in Urbana, Ill.
Cargill said its losses were linked to rejections of U.S. corn.
Syngenta spokesman Paul Minehart said the lawsuits filed by both companies are without merit.
Trans Coastal’s complaint highlights traders’ concerns that MIR 162 can be found throughout the U.S. corn supply chain - from seed planted in farmers’ fields to the byproduct of ethanol production.
Syngenta invested about $200 million and five to seven years developing MIR 162 corn and “selfishly” decided to rush it to market without obtaining China’s approval for imports in a bid to recoup its costs, the lawsuit states. The trait represents about 25 percent of the Swiss-based seed maker’s corn portfolio, according to court documents.
“Syngenta’s motivation in prematurely releasing Viptera corn is greed,” Trans Coastal’s lawsuit says. “If not stopped, Syngenta is going to continue to destroy U.S. exports of corn and DDGs to China.”
China, the world’s largest buyer of DDGs, has stopped issuing permits for imports of the protein-rich byproduct because of concerns it might contain MIR 162, hurting U.S. prices, according to traders.
The case is Trans Coastal Supply Company v. Syngenta AG et al, U.S. District Court, Central District of Illinois, No. 14-2221.
Reporting by Tom Polansek. Editing by Andre Grenon