UPDATE - China issues temporary GMO permits, trade applauds
SHANGHAI - China began to issue much awaited temporary safety permits on bioengineered food imports yesterday, allowing for the resumption of Sino-U.S. soybeans trade worth $1 billion annually, after almost a year of uncertainty.
The world\'s biggest soybean grower had lost at least $180 million in business last year after China issued confusing rules on genetically modified organisms (GMO), causing soybean orders to grind to a halt.
\"We started issuing the first batch today, and we are informing the companies now,\" an agriculture ministry official told Reuters.
The ministry also issued labels for genetically modified organisms to domestic importers yesterday, she said.
Most trading firms breathed a sigh of relief after receiving the safety permits, issued just before the United States\' peak export season ends. But domestic and global oilseed futures markets shrugged off the news as well anticipated.
\"We are very happy to have trade going again and all those soybean and soy products have got to go somewhere, and so we are very happy to see China coming back into the market,\" said Phillip Laney, China country director at the American Soybean Association.
China is the biggest buyer of the U.S. crop, which is 70 percent bioengineered.
The ministry official declined to give more details, but said successful applicants for temporary GMO permits and labels would be posted on the ministry\'s Web site, www.agri.gov.cn
TRADERS HAPPY WITH PERMITS
China first released its controversial rules last June and added to the confusion in January by detailing a complicated and long approval process for GMO safety permits and labels.
It struck a compromise with the United States in March and agreed to issue temporary permits to shorten and simplify GMO applications - a measure that will last through December 20.
Traders welcomed the actual issuance of the certificates, which allows soybean imports from the United States and South America to arrive at any Chinese port.
\"Under \'place of production, the United States, Argentina and Brazil are all written clearly,\" said a trader with a global grain firm in Beijing, who said he had received some calls indicating buying interest.
\"We had some enquiries already today,\" the trader said. \"We\'ll be able to trade soyoil soon too with these soybean certificates.\"
A trader from another global firm in Shanghai said: \"There\'s only the seller\'s name on the certificate with no port and no buyer mentioned.\" He said this meant foreign firms were free to use the same permit for different Chinese clients and ports.
Traders said even though the U.S. export season was drawing to a close, it might still be able to squeeze in healthy exports to China because of Argentina\'s decision to raise export taxes on farm goods.
Higher taxes would dampen the South American country\'s soybean sales, creating a shortage in the market. Argentina is the world\'s third largest soybean producer and exporter.
Futures on the Chicago Board of Trade and the Dalian Commodity Exchange traded mixed across the board yesterday as the news on the safety permits was within market anticipation.
CBOT\'s May futures inched down ) cents to $4.72-= cents a bushel, while Dalian\'s May contract rose four yuan to 2,158 yuan ($260) a tonne.
\"There is nothing earth-shattering about the handing out of the GMO permits because people were expecting it. The market is now more concerned with supplies, now that Argentina\'s soy exports might be curtailed,\" said a trader in Shanghai.
(Additional reporting by Niu Shuping in Beijing and Nao Nakanishi in Singapore).
Story by Lee Chyen Yee
REUTERS NEWS SERVICE
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