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U.S. Corn Cargo Rejected by China May Go to Japan, Unipac Says

Nov. 2 (Bloomberg) -- A shipment of U.S. corn rejected by China on the grounds that it contained a genetically modified strain not approved in the country may be resold to Japan for livestock feed, Unipac Grain Ltd. said.

Japan approves all varieties of U.S. genetically modified corn that are in commercial production, Nobuyuki Chino, president of the Tokyo-based trading company, said by phone yesterday. Chino has traded grains for more than 30 years.

China rejected a 54,000 ton cargo bought by Cofco Ltd. from a Japanese trading company, two officials with direct knowledge of the matter have said. This was the first time China rejected a U.S. corn cargo, and the grain, stored in the southern port of Shenzhen since September, will probably be ordered out of the country, the officials said.

China, the world’s second-biggest corn consumer, has bought about 1.5 million tons of the U.S. grain this year, the most since about 1995, as the government sought to cool domestic prices that gained 27 percent in the past year. Futures have surged 52 percent in Chicago as drought in Russia and Ukraine and floods in Canada pushed up global grain prices.

The quarantine department’s decision to reject the cargo was reached after tests on as many as eight samples, one official said. The government may make an announcement in the next few days, one official said. They declined to be identified as they are not authorized to discuss the matter publicly.

The press office at the General Administration of Quality Supervision, Inspection and Quarantine declined to comment. The Cofco press office also declined to comment.

To contact the reporter on this story: William Bi in Beijing at wbi@bloomberg.net Aya Takada in Tokyo at atakada2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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