China approves first shipment of Argentine GMO corn shaking world markets
China has approved its first shipment of genetically modified Argentine corn, Buenos Aires-based trade sources said, which could mean that the Asian giant may eventually import GMO crops from other producers like the United States.
Benchmark Chicago corn futures fell briefly after the market learned about the shipment. Argentina competes for market share with the United States, the leading world corn exporter. But CBOT corn futures, which were already depressed due to good US crop weather, ended the session mixed.
US farmers could eventually benefit from China finally opening the door to GMO corn imports. Demand for corn-fed pork and poultry has boomed in China as a growing middle class can afford a higher-protein diet.
The Argentine corn was imported by China’s state-owned trading house COFCO and left Argentina about a month ago, said three Buenos Aires-based grains trading sources with knowledge of the situation.
The market knew since May that Argentine corn was headed to China. But questions lingered as to whether it would be approved for entry by the AQSIQ, China’s General Administration of Quality Supervision, Inspection and Quarantine.
“The cargo has now been approved by the AQSIQ and the vessel has been discharged in China. The corn is officially imported and on its way to end customers,” said a source at a major trading company in Buenos Aires.
Chicago corn prices have fallen sharply from record highs last summer, and many analysts and traders expected prices to fall further on prospects for a US bumper crop this season.
In contrast to last year, the world is expected to be awash with corn for the foreseeable future, keeping prices in check. Argentina’s 2012 and 2013 crop is nearly all harvested.
China is seen by corn futures traders as a wild card in their attempt to pencil in specific price projections. Most Argentine corn is genetically modified. A small amount was allowed into China late last year as a test case under a China-Argentina GMO deal signed in February 2012.