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Biotech Industry Worried Over China's New GE Policy

Biotech Industry Worried Over China's New GE Policy

SINGAPORE: China Oilseeds - GM turmoil as S. American soy arrives
08 Jun 2001
Source: Reuters

By Nao Nakanishi

SINGAPORE, June 8 (Reuters) - China's new rules on genetically modified (GM)
foods have caused turmoil in the oilseed market as huge amounts of
gene-spliced soybeans are set to arrive there from South America, traders
said on Friday.

They said according to the new rules, announced on Wednesday and effective
immediately, all production, sales and import of GM foods requires
government approval certifying that they do not cause any harm to humans,
animals or the environment.

The new regulations also require that GM products be labelled as such before
being put on sale.

But traders said the announcement left many details unclear, including which
authorities were in charge of issuing such certificates and even the
definition of GM foods.

The new rules were announced just as more than 1.5 million tonnes of
soybeans are scheduled to arrive each month in China from South America.

Argentina is one of the world's top growers of GM-soybeans, although Brazil
claims its soybeans are free of GMO (genetically modified organisms).

"There is a possibility that the government will reject the imports. It
would be unreasonable, but we have no idea how the government will implement
these regulations," said a trader at one of the major international houses
in Shanghai.

Another trader in Hong Kong agreed, saying: "If they really turned them (soy
cargoes from South America) down, it would become a big issue in the global
market. They've committed to a lot of beans."

Chinese soy imports are expected to rise to 11-12 million tonnes this year
from around 10 million tonnes in 2000.

NO DISRUPTIONS AT PORTS

Some major Asian importers of agricultural products, such as Japan and South
Korea, have already introduced the labelling of GM products but only after
months of preparations. They also pay for segregation of GM products from
non-GM items.

To date traders have not heard of any disruptions at Chinese ports in
discharging soybeans from Argentina or Brazil, but news of the new
regulations has helped prop up domestic soybean prices, along with a
recovery in the Chicago futures market.

But the announcement has also caused a halt to the country's purchasing
activities of South American beans, traders said.

Some also cast doubt on a report from Chicago overnight that China had
bought three cargoes of South American beans, in addition to five cargoes of
U.S. beans, including one for August shipment.

Others said China had committed to six or seven cargoes of U.S. new crop
soybeans for October and November shipment so far, including a few sealed
this week at premiums slightly below 90 cents per bushel over Chicago
futures.

Traders expect virtually no arrivals of rapeseed from Canada, in the near
future as the country was about to finish harvesting its own crop and
international prices have been high due to shortfalls in Canada and
Australia so far.

China had covered its soybean needs from South America for shipment between
April and July before its own harvest due around October, and is seen
switching back to U.S. origin beans later in the year.

The trader in Hong Kong said Chinese buyers might have cancelled some South
American cargoes before the announcement due to stagnant domestic soy
prices.

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