China could face premiums on future corn purchases after rejecting U.S. genetically modified corn in recent months, an official with the U.S. Department of Agriculture said on Thursday.
"The Chinese are going to have to learn that their actions will have consequences," USDA China chair Fred Gale told the AgResource Cereals Europe event.
China has officially rejected 887,000 tonnes of U.S. corn since November last year, after detecting Syngenta's unapproved MIR162 in incoming shipments.
The GM strain is designed to offer enhanced protection against crop-damaging insects and is approved in many countries.
China is the third-largest buyer of U.S. corn and has approved 15 genetically-modified corn varieties for import.
MIR162 has been awaiting approval since Syngenta submitted an application in March 2010, even though MIR162 has been mixed in with other varieties since China started to import U.S. corn in 2011.
The American Chamber of Commerce, which counts seed firms including Syngenta as members, last month complained that China's biotech approval process had become "slower, unpredictable and non-transparent".
"Sellers are going to have to add a risk premium if China is going to be a risky customer, but of course this is not the first time it's happened. It's happened periodically with various commodities where there have been rejections of shipments," Gale said.
"They are going to need to import if their market keeps growing and they are going to need to be a predictable and dependable importer in future if they want to do business with the rest of the world."
The rejections raised speculation that the ban was being strictly enforced to prevent cheap imports in a well-supplied market, but China's quarantine bureau said it has been consistent in its checks on genetically-modified farm products and applying rules.
"There's a real, new effort to try and clamp down on regulation of what the Chinese consider food safety, including imports of GMOs. It's a sincere attempt to do that and there's some disagreement from the scientists on the Chinese panel who are making up their minds about the approval," said Gale.
"I think the Chinese found that to be a convenient tool to use to try and protect the Chinese market," he said.
China's biosafety committee is scheduled to hold its annual meeting at the end of March. If no decision is taken on Syngenta's pending application, the next opportunity for a review will be in June.
The USDA pegs China's 2013/14 corn imports at 5 million tonnes.
