The U.S. Grains Council this week said China's demand to certify that imports of U.S. dried distillers grain are free of MIR 162, a variety of genetically modified corn, cannot be fulfilled and that China should approve the variety for import.
"China is asking for something that cannot be done. This certificate they are asking for does not exist," USGC President Tom Sleight said in a statement.
The mandate has disrupted trading of DDG and will make future trading "hard to achieve," USGC said.
"It's time for China to look at and approve this trait," Sleight said. "It's been approved for commercialization in the United States since 2010, and it's been approved by all importing countries, including the European Union, for quite some time. We think that the lack of approval of MIR 162 is becoming an undue impediment on trade."
The Council is working to address the new disruption to DDG trade with the U.S. government and the U.S. ambassador to China, as well as with MAIZALL, which represents grower organizations in several major corn exporting countries.
China's demand for certification has raised allegations the action was designed to limit imports of lower-priced U.S. corn.
"China has huge reserves, and used the unapproved MIR 162 trait as an excuse to keep out any lower priced competition from the U.S.," said Bryce Knorr, Farm Futures senior grain analyst.
By limiting imports, Chinese processors must buy from local farmers or government reserves at prices higher than imported corn.
"Corn futures in China are trading for the equivalent of $9.56 a bushel and the cost of U.S. corn delivered out of the Gulf is under $6 currently. Processors in China would love to buy U.S. grain, which is also better much better in quality than reserves that have been sitting around for three years," Knorr said. "Even auctions of old U.S. corn imported several years ago attracted better demand than local inventories in the reserves."