China May Delay U.S. Corn Buying as Cargo Held

November 27, 2013 03:19 AM
China May Delay U.S. Corn Buying as Cargo Held

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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