China’s rejection of U.S. grain grown with seeds genetically modified by Syngenta AG may cost U.S. growers as much as $6.3 billion in losses through August 2015, a U.S. trade group estimated.
The Asian nation turned away at least 1.45 million metric tons of corn since late November, “substantially greater” than the 908,800 reported by the Chinese government, the National Grain & Feed Association, based in Washington, said today in a statement. The grain contained a gene developed by Basel, Switzerland’s Syngenta, and that MIR 162 variety hasn’t been approved by China.
The “zero-tolerance policy” by China has cost as much as $2.9 billion in corn, distiller grain and soybean revenue, the U.S. group said, and as much as an additional $3.4 billion may be lost in the 12 months starting Sept. 1 after Syngenta offers another modified corn seed still to be approved by China and several other countries.
“All of us are very hopeful that China will soon approve” the MIR 162 trait, Randall Gordon, the president of the trade group, said in a telephone interview. “Growers need to weigh the benefits of the access to new technology with what their markets are.”
The group estimates that benchmark U.S. corn prices are 11 cents a bushel lower because of the trade discord. Some U.S. soybean shipments were canceled by China after tests for MIR 162, and prices probably fell 15 cents a bushel, the association said.
Cancellations to date cost in a range of $1 billion to $2.9 billion, and the introduction of the new seed that hasn’t been approved may lead to losses from $1.2 billion to $3.4 billion, the group said.
On the Chicago Board of Trade today, corn futures for July delivery fell 1.2 percent to settle at $5.035. The grain has advanced 19 percent this year, entering a bull market on March 31 as export sales climbed and record-high cattle and hog prices boosted prospects for demand in livestock-feed rations.
Soybean futures for July delivery rose 1.4 percent to $15.0875, capping the biggest three-day rally since November as demand from U.S. mills climbed to a record. The oilseed has gained 17 percent this year.
Corn is the biggest U.S. crop, followed by soybeans, and China is the biggest oilseed importer.
The U.S. is the leading corn exporter and second-biggest soybean shipper, trailing Brazil.
More than 1,050 grain, feed, processing, exporting and other related companies belong to the National Grain & Feed Association.