BEIJING, Jan 15 (Reuters) – Chinese quarantine authorities have rejected more distillers’ dried grains (DDGs), a corn by-product from the United States, due to the presence of an unapproved genetically-modified (GMO) strain, traders said on Wednesday.
The rejections go against expectations by some traders that local authorities were relaxing checks on DDGs after a number of shipments were cleared last week.
Local traders said quarantine authorities at the northern port of Qingdao rejected an unspecified volume of U.S. DDGs this week after shipments were found to contain traces of Syngenta AG’s MIR 162, which has been awaiting Beijing’s approval for more than two years.
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The latest rejections are on top of about 2,000 tonnes of DDGs that were turned away in December, and the rejection of more than half a million tonnes of MIR 162-contaminated U.S. corn.
“Some shipments were rejected over past days at Qingdao and that has tightened storage here,” said one trader with a major domestic trading house. “Authorities are conducting strict checks.”
He estimated that the amount of DDGs rejected over the past few days at Qingdao port alone was more than 10,000 tonnes.
Quarantine authorities in Shanghai had also rejected more shipments, said one Shanghai-based trader. However, custom authorities had allowed the companies to temporarily store the grains at the warehouses until they find overseas buyers.
“There is no relaxation at all. The situation has not improved and authorities have been turning away shipments,” said the Shanghai-based trader, who declined to be identified.
Traders also said a full bulk cargo of U.S. DDGs may also face rejection at the port of Huangpu in the southern province of Guangdong. Local quarantine officials reached by Reuters declined to comment.
The price of DDGs rebounded strongly last week from steep declines last month in the wake of the rejection of several shipments by top importer China.
Industry sources have said Beijing’s GMO corn scrutiny is due to a domestic supply glut as it seeks to curb cheap imports and support domestic corn prices.
The rejections have pressured Chicago Board of Trade corn prices, with DDGs traders fretting that cargoes would be difficult to switch to other destinations as the substitute for corn and meal in animal feed is not widely used in the rest of Asia.
