Will Chinese rejection of one US corn cargo delay further purchases? 11/27/13

China May Delay U.S. Corn Buying as Cargo Held, Shanghai JC Says

 

 

By Bloomberg News

Nov. 27 (Bloomberg) — Corn shipments to China from the

U.S. may be delayed after authorities in southern Guangdong

province this month rejected and held a cargo containing an

unapproved variety, Shanghai JC Intelligence Co. said.

Domestic buyers and global suppliers may refrain from

signing agreements because they don’t know whether the

government will stop more cargoes, said Li Qiang, chairman of

the Shanghai-based researcher.

Inspectors at Shekou port rejected a 60,000-metric-ton

shipment of U.S. corn containing the MIR 162 variety developed

by Syngenta AG, which hasn’t been approved by the Ministry of

Agriculture, China National Grain & Oils Information Center said

on Nov. 20. Delaying purchases may hurt corn prices in Chicago,

which traded near a three-year low after U.S. farmers gathered a

record harvest.

“Few traders will want to risk supplying something that

cannot be guaranteed to pass inspections,” Li said by phone.

“While this doesn’t look like a concerted effort to curb

imports, people will wait until they see the outcome.”

Corn for March delivery rose 0.1 percent to $4.25 a bushel

on the Chicago Board of Trade. On the Dalian Commodity Exchange,

the contract for May settled at 2,365 yuan a ton, or $9.86 per

bushel, more than twice the cost of U.S. corn.

Li wasn’t able to comment on whether the corn held at the

port would be shipped out of the country. The company that

bought the grain, state-owned COFCO Corp., may try to lobby the

government to negotiate a settlement, he said.

A faxed request for comment to the General Administration

of Quality Supervision, Inspection and Quarantine, wasn’t

answered. Yin Jianhao, a spokesman at COFCO, couldn’t be reached

on his mobile telephone.

China will want more U.S. corn sooner or later, given its

large discount to the domestic crop, Li said.

Shanghai JC maintained its import projection of 6.6 million

tons in the 12 months ending Sept. 30, he said. The U.S.

Department of Agriculture projected 7 million tons on Nov. 9.

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