China Grains-GMO headache back after short respite
Date: 16-Oct-02
Country: CHINA
Author: Nao Nakanishi
On Friday, China said it would extend an interim measure on GM food imports for nine months until September 20 next year, allaying market worries that Beijing might disrupt soy imports in December for the second time this year.
The announcement comes ahead of the Sino-U.S. summit next week and follows Washington's repeated requests to Beijing to smooth the way for the US$1 billion soy trade between the two countries.
But after studying the announcement, traders were no longer certain whether Beijing would really allow soy imports beyond December 20.
The documentation process, laid out in Friday's announcement, looked to be more difficult than the current regime, they said.
Confirming such worries, an official at the Agriculture Ministry told Reuters the whole procedure of acquiring temporary safety certificates and labelling approvals for imports of GM soy could take 60 working days.
Some traders said it might take another 30 working days for quarantine authorities to issue the required papers.
In addition, the announcement stipulates the temporary permits can be used only once, not repeatedly as is the case at present.
"If each shipment needs to have a certificate, it is going to be a nightmare," said a trader at a major international house.
"Obviously they are going to keep the control. There's no question about that.... The question is whether they really intended to open it up from December to next September," the trader added.
The traders said the only way to find out the real intention of Beijing was to apply for the temporary certificate and see how it would react.
Although the Agriculture Ministry said foreign exporters could now apply for the permits, so far no foreign suppliers have managed to secure one, due in part to the lack of clarity in the procedure, traders said.
AMPLE SOY FOR NEXT FEW MONTHS
Despite such uncertainties, the traders were not panicking, with ample soy cargoes arriving at present and the ongoing domestic harvest of a record crop of 16 to 17 million tonnes.
"We are not in hurry. We have time to get better understanding of this," said an analyst in Shanghai.
"Currently the prices of U.S. new crop prices are not so attractive. Maybe not much buying or trade will happen.... We are quite optimistic on this issue."
Other traders agreed, saying hardly anybody in China was currently interested in booking more U.S. beans as domestic soybeans were priced by some 200 yuan ($24) per tonne cheaper than U.S. oilseed seen at around $240 per tonne, C&F.
Some noted there was persistent talk of cancellation or deferals of a few U.S. soy cargoes by Chinese buyers, though no traders could confirm such moves.
"I'm quite sure there were a few that were either deferred or cancelled. But frankly I haven't got any confirmation of those," the first trader said.
Looking further into 2003, the traders said, however, China has booked already 35 to 40 South American cargoes for shipment after April, though premiums have climbed to about 50 U.S. cents per bushel from around 45 last month.
