China stops issuing import permits for U.S. distillers grains-trade

Image courtesy of UNL Extension

(Reuters) - Quarantine authorities in China have stopped issuing permits for the import of distillers dried grains (DDGs) from top exporter the United States due to the presence in some shipments of an unapproved genetically-modified organism (GMO), traders said.

Authorities have also asked buyers to re-export earlier shipments that contained MIR 162, a GMO strain developed by Syngenta AG that has not been approved for import by China's agriculture ministry.

Qingdao, the country's largest port for DDGs, stopped issuing new permits for shipments last month to any buyers who had still not shipped out any cargoes previously denied entry by quarantine authorities.

"Now it is countrywide. Quarantine authorities stopped issuing import permits last Friday," said one trading manager with a major buyer.

"They asked us to take those rejected shipments away first," said the manager, who declined to be identified as he is not authorized to speak to media.

Shipments denied entry over the presence of the unapproved GMO have until now been stored in bonded warehouses.

Analysts said authorities have required buyers to remove some 250,000 tonnes of U.S. DDGs denied entry into China due to the presence of MIR 162 and stored at major ports.

Quarantine authorities declined to comment on the matter when reached by telephone.

Chinese importers have been reluctant to re-export those shipments partly because it is hard to find overseas buyers.

China is the world's largest buyer of DDGs, a protein-rich by-product of corn-based ethanol that is used as livestock feed.

China's imports of DDGs hit a record high in April at 613,678 tonnes, a rise of 252 percent from a year ago, with buyers undeterred by government scrutiny since late December, when authorities rejected more than 2,000 tonnes of the grains.

China has also rejected in aggregate since late last year more than 1 million tonnes of U.S. corn due to the presence of MIR 162.

Expectation of falling imports have supported domestic rapeseed meal prices, the most-active September 2014 contract rose 2.73 percent to more than one-month high at 3,045 yuan ($490) per tonne.

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