China Said to Suspend Import Permits for Corn Product

Photographer: Daniel Acker/Bloomberg

Dried distillers grains, a by-product of ethanol production used as feed for livestock, are loaded onto a grain truck at an ethanol plant in Underwood, North Dakota. China is the largest buyer of the by-product produced when corn is stripped of starch for ethanol production. Close

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Photographer: Daniel Acker/Bloomberg

Dried distillers grains, a by-product of ethanol production used as feed for livestock, are loaded onto a grain truck at an ethanol plant in Underwood, North Dakota. China is the largest buyer of the by-product produced when corn is stripped of starch for ethanol production.

China’s quarantine agency suspended issuing permits to import a U.S.-produced animal-feed ingredient made from corn, said three trading executives whose applications were denied.

Effective June 6, U.S. shipments of dried distillers’ grains, known as DDGS, can no longer enter the country, because the government deems them a high risk of containing MIR 162, a genetically modified strain that China hasn’t approved, said the executives, who asked not to be identified as they are not authorized to speak to the media.

China is the largest buyer of the by-product produced when corn is stripped of starch for ethanol production. While U.S. corn shipments into the country plunged amid restrictions on the MIR 162 variety, imports of DDGS continued to rise because some port officials had been lenient, said Sylvia Shi, an analyst at Shanghai JC Intelligence Co.

“It looks like the government is determined to stop any form of corn imports from the U.S.,” said Shi, from the Shanghai-based agricultural research company.

An official in the spokesman’s office of China’s General Administration of Quality Supervision, Inspection and Quarantine in Beijing asked for questions to be faxed when contacted by telephone today. There was no response to questions faxed by Bloomberg News.

Corn for July delivery in Chicago fell 0.9 percent to $4.5475 a bushel at 3:37 p.m. in Beijing. DDGS at New Orleans were at $253 a metric ton June 6, U.S. Grains Council estimates.

More than 40 percent of U.S. corn is used to make ethanol, government data show. China last year bought 34 percent of U.S. DDGS exports, more than twice the share of second-placed Mexico, according to the council, which promotes exports of U.S. grain.

About 613,678 tons of DDGS imports were reported by China’s customs in April, a monthly record, according to Shanghai JC data. About 600,000 tons, tested positive for MIR 162, are still held at some ports and may be returned, according to the Chinese researcher.

To contact Bloomberg News staff for this story: William Bi in Beijing at wbi@bloomberg.net

To contact the editors responsible for this story: Brett Miller at bmiller30@bloomberg.net Sungwoo Park

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