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Dried distillers grains held as China rejects GM strain

March 13, 2014

China's outstanding orders of US dried distillers' grains (DDGs), a corn-based feed ingredient, are at risk of being cancelled as the country continues to reject a genetically-modified corn strain, Bloomberg reported Shanghai JC Intelligence Co as saying.

China's outstanding orders of US dried distillers' grains (DDGs), a corn-based feed ingredient, are at risk of being cancelled as the country continues to reject a genetically-modified corn strain, Bloomberg reported Shanghai JC Intelligence Co as saying.

The bulk carrier-sized shipments for delivery between January and March were contracted before inspectors began refusing imports containing the insect-resistant MIR 162 gene, Sylvia Shi, an analyst at the Shanghai-based agricultural researcher said on 8 January. About one million tonnes of such contracts are outstanding, according to a survey of Shi and four traders by Bloomberg News.

The unexpected clampdown of US grain imports has led to rejections of 601,000 tonnes of corn and DDGs, a by-product of ethanol, according to the Xinhua News Agency. A halt in China's purchases of DDGs – the biggest global buyer – will hurt prices of corn and reduce profits for ethanol producers such as Archer Daniels Midland Co (ADM).

In two hearings with importers on 7 January and 8 January, held separately at Guangzhou and Shanghai, quarantine agents gave no indication that the crackdown would be eased, Shi said.
Buyers stand to lose about US$20-30/tonne on their purchases if they cancel orders, Shi said, adding that “everyone is hoping for a speedy resolution.”


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