Sunday, May 2, 2010

Importing corn "not complicated"

China National Grain and Oils Information Center's (CNGOIC) weekly corn market report from last week describes a "hot" corn market. All corn offered for auction from state reserves sold (in contrast to auctions last year where small percentages were actually sold), and the auction prices were up from the previous week.

According to CNGOIC, it is rumored that "many" companies are going through the procedures to import corn, having received import quotas distributed by the National Development and Reform Commission in March. It is rumored that applications for import permits have been made for over 400,000 mt of corn.

CNGOIC says the procedures for importing corn are "not complicated." According to CNGOIC, the basic process is:
(1) exporter provides a genetically modified organism (GMO) safety certificate, presently certificates have been issued for 11 GM corn varieties.
(2) importer applies for corn import quota.
(3) importer applies to the AQSIQ for a quarantine and inspection license.
(4) importer applies for GMO approval stamp from the Ministry of Agriculture GMO Safety Office.
(5) importer and exporter sign contract, importer supplies letter of credit.
(6) After imported corn reaches the port it goes through quality and inspection procedures, customs releases it.

CNGOIC says rumors of signed contracts for imports are increasing. Shandong Xiwang Starch Sweetener, Sichuan New Hope Feed and Guangzhou Shuangqiao Starch Sweetener are among the rumored importers. Most of the rumors are not confirmed since companies don’t want to reveal what they’re doing.

CNGOIC says some industrial processing companies don’t want to use genetically modified (GM) corn from the United States since they export citric acid, lysine, and starch sugars to European customers who are not receptive to GM products. Consequently, CNGOIC says domestic feed enterprises are the main potential importers.

The article above says GM content is not an issue that will block imports--it reports that importers already have GM approvals from the Ministry of Agriculture. Another article in the same CNGOIC report discusses imports of non-GM corn from Southeast Asia totaling 15,000 metric tons during January-March which have a lower "policy risk."

CNGOIC says the market thinks non-GM corn imports could be 300,000 mt, but the supply of corn from southeast Asia is limited due to bad weather in those countries this year. Customs statistics reported by CNGOIC say most of China's corn imports in 2009 were from Burma and Laos, but only a few thousand tons have come from those countries this year. Moreover, the quality of the corn from Southeast Asia is said to be poor--useable only as poultry feed--and not much cheaper than low-quality domestic corn in southern China.

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