DTN’s Top Ag Stories: China’s GMO Ban Roils Grain Markets

The bright yellow poster posted on the door of Bunge’s Hannibal, Mo., river terminal told a tale this fall. The placard listed the genetically engineered corn and soybean traits they would not purchase. Other grain companies required notification of delivery of such traits or stipulated delivery periods in order to properly funnel the grain.

China’s unwillingness to put their stamp of approval on some selective GE traits became the face of a critical market access issue in 2014.

As grain companies struggled to deal with the China’s no-tolerance policy, seed companies faced further delays on products already deregulated in the U.S. Last week China issued the first safety certificates in over a year, but growers went into the seed-ordering season uncertain as to what traits might still face bottlenecks.

Although this issue has been brewing for several years, concerns came to a head in November 2013 when China rejected U.S. corn and distillers’ dried grains shipments that tested positive for Syngenta’s Agrisure Viptera insect trait, also known as MIR 162 — a product that had been grown in the U.S. with full regulatory approval since 2011.

Concerns escalated when Syngenta announced intentions to commercialize Duracade in 2014, a new Bt rootworm trait that has U.S. regulatory approvals, but no thumbs up from China. The National Grain and Feed Association and the North American Export Grain Association called upon Syngenta in January 2014 to suspend commercial sales of both Viptera and Duracade.

Instead, the seed giant forged a relationship with Gavilon Grain to steward grain produced from Duracade in 2014. Gavilon made more than 15,000 calls to producers located in 632 counties and 18 states throughout the spring and summer to keep Duracade-produced grain directed into proper channels.

In April 2014, NCGA released a study that estimated Viptera costs to U.S. corn, distillers grains and soy sectors at as much as $2.9 billion because of the uncertain trade environment. By December 2014, Cargill, Trans Coastal (an Illinois-based exporter of DDGs), Archer Daniels Midland and over 130 farmers had filed suit against Syngenta for market losses.

Although the Viptera trade scenario shares some similarities with StarLink and LibertyLink rice, there’s one big difference: Those products did not have the necessary approvals for U.S. cultivation when discovered in the grain stream.

U.S. Agriculture Secretary Tom Vilsack announced last week that China had given import approvals to Viptera and two soybean traits. Bayer’s LibertyLink 55, an herbicide-tolerant trait that allows for better stacking has been waiting for China acceptance since 2007. DuPont Pioneer Plenish soybeans, genetically altered to have no trans-fats and lower saturated fat levels, already had necessary China approvals, but received an additional certificate for a stack of traits.

China’s policy is to require full approval of a trait in the originating country before it will consider an application for approval for import. This automatically puts Chinese approval several years behind other key trading partners, which run their approval process concurrently with U.S. agencies. A typical time period has been two years, but China approvals have become much more erratic over recent years.

Do the recent China approvals indicate a return to a more reasonable timetable?

Many vital traits and the companies developing them live in hope. Dow AgroSciences plans a “stewarded release” of the Enlist Weed Control System in corn and soybeans in 2015. The 2,4-D-resistant traits associated with those seeds recently gained approval for cultivation in the U.S., but do not have approval in China.

Monsanto’s new Roundup Ready Xtend System offering dicamba tolerance in soybean and cotton is expected to gain regulatory approvals in the U.S. this spring. The company has indicated they will market cotton if deregulation occurs in time for 2015 planting, but not soybeans.

GE soybeans that tolerate isoxaflutole and mesotrione herbicides, from Bayer CropScience and Syngenta, have both received U.S. approvals for cultivation, but do not have China regulatory approvals.

Presently, there is no official list of “key trading partners” needed before a seed company can commercialize a trait in the United States. U.S. commodity groups do make recommendations and have dialogues with companies, but in the end, it is up to seed companies to make the judgment call.

In December 2014, Syngenta dismissed claims related to Bunge’s refusal in 2011 to purchase Viptera corn from farmers, which Syngenta said implied problems with the product. No legal fees or costs were awarded in dismissal.

Industry groups have been forged to consider protocols to address and attempt to prevent further trait troubles. The big question is: Who is liable when contamination occurs?

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