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U.S. corn shipments to China continue, but new sales dry up
U.S. exporters continue to load corn shipments to China despite uncertainty over whether cargoes could be rejected because of an unapproved genetically modified strain, although volumes have declined recently, government data showed on Thursday.
Meanwhile, new sales to the world’s second-largest corn consumer have dried up and some grain previously sold to China has been diverted to neighboring countries that have signed off on Syngenta AG’s MIR 162 corn, also known as AgrisureViptera.
The U.S. Department of Agriculture confirmed 245,500 tonnes in U.S. corn shipments to China in the week ended Dec. 12,representing more than a third of all corn shipped last week.But shipments bound for China were down 34 percent from the prior week, and 58 percent from two weeks earlier, the USDA data showed.
Also, the USDA reported 124,000 tonnes in net sales to China last week, but that included a net 180,000 tonnes in previously reported sales switched from “unknown destinations.” It also included 60,000 tonnes switched to South Korea and a net reduction of 4,700 tonnes.
“That basically shows a net cancellation last week. It also confirms that those shipments to China are ending up in SouthKorea,” said Rich Nelson, chief strategist with Allendale Inc.
Export sales are sometimes reported to “unknown destinations” to disguise the buying country, traders said.Shippers are only required to declare an actual destination once the grain is loaded at the port, at which point sales to specific destinations are confirmed. Although the transactions are reported by the USDA as sales in a given week, the purchases actually took place weeks or months earlier.
Uncertainty about MIR 162 approval is partly to blame for the decrease in new purchases, analysts said.
“From an importer’s point of view I’d be a little reluctant,seeing these rejections, to put more on the books not knowing whether they would be able to make grade or not,” said ShawnMcCambridge, an analyst with Jefferies Bache.
China’s customs authority has confirmed that 4 to 5 cargoes of U.S. corn have been rejected because they contained unapproved GMO material. Private analyst JC Intelligence has put that number at 10 cargoes, or 600,000 tonnes.
A trade delegation from the United States is visiting China this week and the GMO corn rejections are expected to be on the agenda.
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