Market Matters Blog

A high-level discussion of U.S. and China's trade relationship gets underway in Beijing today, and ag market issues, particularly biotech, have earned their place on the agenda.

The hot topic: corn cargo rejections. Official tallies from China's inspection service indicated that 180,000 metric tons of corn was rejected because of the presence of an unapproved biotech trait MIR 162, known more commonly to farmers as Syngenta's Agrisure Viptera. A private analytical firm argued this week the corn rejections more likely total 600,000 mt so far.

China's been working on approving the MIR 162 trait for import into China, DTN's China Correspondent Lin Tan reported last week, and some Chinese experts said they thought it'd be approved by the end of the year or early next year. But with the Chinese, you never know. Some thought approval for this trait would come in 2012.

Synchronizing biotech import approvals is key for the industry since many seed companies have adopted a policy where they won't bring new varieties to market without approval from major importing countries.

Agriculture Secretary Tom Vilsack told USDA' radio service this week that ongoing negotiations have brought the U.S. and China closer to changing this policy.

"We've talked a lot about the need to synchronize our regulatory processes in terms of biotechnology so that this new technology that can expand production of crops can get into the field sooner. After careful analysis and focus on challenges risks, we want to make sure we've done a thorough job of that," Vilsack said.

"But we think we can speed that process up by working collaboratively with the Chinese to have our regulatory processes work in sync. Right now the process in China is to not begin their process on a new event or new crop until such time as we in the United States have finished our process. We think we can at least start them simultaneously. That's one of the agreements that we've reached and we are hopeful of being able to work out the details of how that pilot might work specifically this year."

While a pilot program may not do much to resolve the current situation -- they'll likely discuss that this week -- it could be a good start to preventing similar trade disruptions in the future.

I read an interesting Bloomberg article today about China's social issues surrounding genetically modified foods. There's been little news in Chinese media about the rejected corn shipments, and the article points out that many Chinese underestimate the amount of genetically modified foods they consume. There's a fear that GM foods contribute to infertility and there's a faction of Chinese that view this as a threat to national security. An education effort on behalf of GM foods is underway, the column explains. Here's a link to the Bloomberg article: http://bloom.bg/…

For USDA's interview with Vilsack: http://1.usa.gov/…