China, one of the world's largest corn importers, is likely to reject more U.S. shipments of the grain after they were found to contain a genetically modified variety not approved by Beijing, traders said.
That has sparked fears that other cargoes could be turned away, with some traders and buyers warning that uncertainty over the discovery could prompt a sharp decline in new Chinese orders for U.S corn.
"We are completely lost and have no idea how to deal with the situation," said one executive with a major animal feed mill.
"Not all corn cargoes were blocked for entry, but it is a messy situation."
An initial U.S. corn cargo was rejected in mid-November due to the discovery of the same variety, Syngenta AG's Agrisure Viptera, at a time when U.S. corn exports to China have been soaring as Beijing grapples with record-high domestic corn prices and rising demand for food.
Traders have said that the variety, also known as MIR 162, is set to be approved by China soon. It is already shipped to destinations such as top corn importer Japan, South Korea and the European Union.
Slowing Chinese demand would drag further on global prices that have dropped around 40 percent so far this year on expectations of a bumper U.S. harvest. Chicago Board of Trade December futures eased on Tuesday in Asia.
One cargo of about 60,000 tonnes in the southern province of Fujian was found to be tainted with MIR 162, traders said on Tuesday.
The same GMO strain was found in another 49 containers, equivalent to 1,225 tonnes, at the port of Shenzhen, they said. It was Shenzhen's quarantine authority that last month rejected one cargo of the grain from the United States containing MIR 162.
"Since this is the same GMO in the latest discovery, the shipments may have to be blocked for entry," said one trader.
Quarantine officials at Fujian, Shenzhen and Beijing declined to make immediate comment.
