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China has rejected 600,000 metric tons of U.S. corn

There are growing questions regarding China’s recent rejections of U.S. corn shipments. Since mid-November, China has rejected more than 600,000 metric tonnes of U.S. corn charging it contained an unapproved genetically-modified variety. The variety, Syngenta’s MIR 162 also known as Viptera is accepted by a number of countries and has been awaiting approval from Beijing for more than two years. It is the topic of negotiations between the two countries this week.

Li Quiang, chief analyst with the private firm JC Intelligence (JCI) tells Reuters nearly 40 cargos of U.S. corn have arrived in China since the middle of November and more than half have been accepted.

USDA Grains Analyst Jerry Norton says China has 7 million metric tons of corn booked for this year from all sources: they’ve already shipped 3 million tonnes from the U.S., “they still have about 2.7 million tonnes on the books and there is maybe as much as a million tonnes or more on the water headed that way and what will happen to that grain is the big question in all of this.” That “unknown” has been putting pressure on corn prices. Yes, the rejected corn could be rerouted to other countries which accept the variety but they may have already booked their needs.

Some speculate the rejections are due to a glut of corn in China thanks to a record domestic corn harvest and a decline in animal feed consumption. Production for the year is estimated to be at least 211 million tonnes while consumption is put at 197 million tonnes. There is the possibility they might be just trying to get the price down.

There are also a couple of trade disputes currently between the two countries and then there’s the arrest of three Chinese nationals in Iowa and Kansas last week in an alleged attempt to steal biotech corn from test plots and research facilities. That investigation goes back to stolen seed corn found in the luggage of a Chinese trade delegation boarding a plane in Kansas City on August 7th.