Quarantine inspectors at China’s Qingdao port rejected batches of dried distillers’ grains from the U.S. this week because they contained a banned gene, according to two buyers who had orders blocked. Prices fell.
The corn-derived feed ingredient, known as a DDGS, is a by-product of ethanol production. The batches were rejected when officials found they contained the unapproved MIR 162 gene, said the two buyers, who asked not to be identified before an official announcement is made.
Imports from the U.S. are poised to fall further in 2014 after inspectors rejected 601,000 metric tons of genetically altered corn and products derived from the grain last year, the official Xinhua News Agency reported Jan. 6. More than 10 percent of the U.S. crop comes from seeds containing the gene, making it difficult to guarantee any cargo is free of the trait, said Meng Jinhui, an analyst at COFCO Futures Co.
“This crimps U.S. corn exports and helps China digest its big domestic crop,” said Beijing-based Meng, whose brokerage is a unit of the nation’s biggest grain trader. “We expect corn and DDGS purchases by China to drop sharply because MIR 162 may not be approved in the first half of this year.”
The General Administration of Quality Supervision, Inspection and Quarantine in Beijing, which only accepts queries via fax, didn’t respond to a request for comment. The agency’s office in Qingdao, in eastern China, declined to comment when contacted by phone.
Corn for March-delivery on the Chicago Board of Trade fell 0.2 percent to $4.3075 a bushel at 12:08 p.m. Beijing time, extending a 0.7 percent decline yesterday. The spot price for DDGS at Lillebonne, France, dropped 3.2 percent to 256.75 euros ($351) a ton yesterday.
China’s corn imports in the year through Sept. 30 may drop to 5 million tons from a previous projection of 7 million tons, the U.S. Department of Agriculture said in its monthly World Agriculture Supply and Demand Estimates report on Jan. 11. The USDA also increased it estimate for China’s crop by 6 million tons to 217 million tons.
Outstanding orders of U.S. DDGS are at risk of being canceled as China rejects cargoes containing the insect-resistant strain MIR 162, Sylvia Shi, an analyst at Shanghai JC Intelligence Co., said Jan. 8. The agricultural research company is based in Shanghai.
— With assistance by William Bi