"We can't meet all the orders," said Li Yanmei, vice president of Beijing Gingko-Group Biological Technology Co Ltd., which produces vitamin E from Chinese non-GMO soybeans.

"Even some US customers pick non-GMO health products....that's how we have decided to make only non-GMO products."

The company is now building a second production line in Beijing to quadruple its capacity. Gingko is one of a handful of Chinese vitamin E producers that have acquired a GMO-free certificate known as Identity Preservation Certification, or IP, which requires strict quality controls for the entire supply chain starting at the farms.

Ironically, China is the world's top soy importer and buys more than 20 million tonnes of GMO soybeans each year from the United States and South America for the production of soyoil and soymeal, used mainly for animal feed.

But it has not allowed its own farmers to plant the biotech oilseed at home. Its non-GMO soybeans, mostly grown in the northeastern provinces, is becoming all the more rare now that Brazil has joined other world top soy producers -- the United States and Argentina -- to grow GMO soy.

Farmers around the world are switching to the more profitable genetically altered soybeans because they can cut herbicide and other operational costs.

More than 80 percent of the soybeans grown in the United States are herbicide-tolerant GMO Roundup Ready variety, developed by biotechnology giant Monsanto Co.

SUPPLY CHAIN GROWS

Japan or South Korea have long bought Chinese non-GMO soybeans for human consumption, but now the demand is growing for non-GMO soy products from Europe, which introduced strict GMO labelling laws last year.

"Many European buyers are coming to China for IP vitamin E, and also other health and food products," said Chuk Ng of GeneScan, a global leader in biological testing for GMOs, headquartered in Germany.

"There's also growing interest for soy protein. It's a binder for sausages and ham. China produces non-GMO soy protein," said the general manager of GeneScan Hong Kong Ltd.

Carrefour, the world's second-largest retailer, is planning to develop a non-GMO supply chain for soybeans and possibly rice for its stores in China.

"For Carrefour, it's a global policy in every country where we are to give the choice to customers in offering transparent non-GMO products," Antoine Bloch, national quality line manager for Carrefour in China, told Reuters from Shanghai.

Industry officials say segregating non-GMO crops from GMO products is possible but costly, especially for bulk commodities like soybeans.

CHEATERS TEMPTED

In Beijing, the backyard of Gingko's plant is filled with containers of non-altered soy fatty acid, delivered by domestic crushers of the soyoil. The company produces 100 tonnes of vitamin E from about 2,000 tonnes of the fatty acid each year.

"IP control costs a lot of money," said Li. But she said the IP certified vitamin fetches $45-50 a kg, or double the price of the GMO equivalent.

GeneScan's Ng calculated IP certified soy earned premiums of about 5 percent, soymeal 10-12 percent, while more sophisticated products such as vitamin E or lecithin could garner as much as 200 percent in premiums.

But GeneScan's Ng and Zhang Hiaochuan, another vice president of Gingko, said the premiums have encouraged some to cheat as it was difficult to detect genetically modified organisms in highly processed products.