Argentine farmers see green light for more corn to China

Argentine farmers expect China to soon approve their one remaining variety of genetically modified corn yet to be certified for import by the commodities-hungry Asian country.

Corn growers across Argentina's vast Pampas farm belt want to push quickly into the Chinese market while fellow grain exporter Brazil is stuck on the sidelines, waiting for Beijing to approve its genetically modified corn varieties.

China, whose corn market has long been dominated by the United States, allowed its first major Argentine shipment of the grain to enter the country earlier this month.

Traders in Buenos Aires said the 60,000-tonne cargo included some corn of the MIR-162 strain, which has not yet gotten approval from Beijing. But apparently not enough, if any, MIR-162 was in the cargo to cause problems with Chinese customs.

"It's called asynchronicity," said Fabiana Malacarne, biotechnology chief at Argentina's ASA seed industry chamber. "Importing countries permit a low-level presence of non-approved strains."

The Chinese have signaled likely approval of MIR-162 imports later this year or in early 2014, she added.

"The only issue with China is MIR-162 ... which is tough to detect," said an Argentina-based corn trader with a major export company who spoke on the condition of anonymity.

There is broad scientific consensus that food derived from genetically modified crops poses no greater risk than that from conventional ones. However, advocacy groups argue the risks of GMO food have not been adequately identified.

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.

China Wants Meat

Chinese demand is rising for grain-based pork, cattle and chicken feed as the country's expanding middle class wants more meat in its diet.

The United States is the world's top corn exporter, followed by Brazil, which is lobbying China to approve its GMO corn. Argentina, which ranks third, clinched an import deal with China last year.

Various corn varieties are mixed in Argentina's farm-side silos before being trucked to the country's export hubs, making it hard to know which GMO strains are contained in which cargoes.

Aside from MIR-162, all corn strains grown in Argentina - MON-810, T-25, Bt-11, NK-603, TC-1507, GA-21, MON-89034, MON-88017, Bt-176 and MIR-604 - are already approved for import by China, Malacarne said.

Companies such U.S.-based Monsanto and Swiss agrochemicals group Syngenta stand to gain from more use of seeds engineered to increase yield and allow growers to plant in areas lacking optimum corn-growing weather.

"Now that the mechanics are flowing and the first big cargo has gotten into China, we expect future shipments to go smoothly," said Martin Fraguio, head of Argentine corn industry chamber Maizar.

China imports corn mainly from the United States.

Besides bilateral agreements, China requires safety certificates for GMO corn imports. Last month's landmark Argentine corn shipment was imported by Chinese state-owned trading house COFCO.

Futures traders see China as a wild card in their attempt to pencil in price projections.

Chicago corn prices have fallen 28 percent since January after hitting record highs during the North American drought in the summer of 2012. Many analysts and traders expect prices to fall further on prospects for a U.S. bumper crop this season.

Argentina's 2012/13 crop is harvested, and the U.S. Department of Agriculture estimates it at a record 26.5 million tonnes. Oscar Solis, Argentina's deputy agriculture secretary, told Reuters last week that the crop was likely to come in at 32.1 million tonnes, with between 22 million and 24 million tonnes going for export.