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6-Regulation: China rule on GMO soy may not come this week

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TITLE:  China rule on GMO soy may not come this week
SOURCE: Reuters, by Nao Nakanishi
DATE:   November 28, 2001

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UPDATE - China rule on GMO soy may not come this week

SINGAPORE - Beijing is likely to release long-awaited details of China's 
new rules on genetically modified organisms, not perhaps this week as some 
market participants had expected but in the near future, traders said 
yesterday. But the details themselves might not unleash large demand for 
U.S. soybeans - 70 percent of which are genetically modified - as weak 
domestic prices for soy complex had squeezed crushing margins to almost 
nothing, they said. China is also about to fling open the door for soyoil 
imports of possibly as much as 2.52 million tonnes next year as it joins 
the World Trade Organisation (WTO), they said.

After almost six months of waiting and repeated disappointment, traders in 
China, Hong Kong and Singapore were cool to rumours Beijing would announce 
implementation details of the GMO regulations by the end of this week. 
"Uncertainties are still there. But imports continue as crushers are 
buying...I don't think the uncertainties have created any bottleneck, 
though the pace is still slow," a trader in Shanghai said, referring to 
imports. "Stocks are still very high. We still have arrivals and 
Heilongjiang beans. By early next year, there should be no (supply) 
problems." In Beijing, officials of the Agriculture Ministry told Reuters 
it would not take long to release the details, but did not elaborate.


Customs data last week showed that a staggering 897,724 tonnes of soybeans, 
mostly from Argentina and Brazil, arrived in China in October. This was 
down sharply from 1.6 million tonnes in September but well above 571,421 
tonnes in October 2000. An analyst at the State Cereals Information Centre 
told Reuters China's port stocks of foreign beans stood still as high as 
one million tonnes. Another 500,000 to 600,000 tonnes were arriving this 
month, he said.

Traders agreed Beijing would never halt imports of soybeans as the country 
had an obvious deficit of the oilseed. Nor had they heard of difficulties 
in discharging or moving U.S. cargoes that arrived this month. Yet they 
said Chinese imports in the year 2001/2002, which began in October, would 
not exceed last year's 11.17 million tonnes as initially expected. They 
might also fall short, although nobody was willing to pin down the number.

Imports of soy oil, even if not quite as much as 2.52 million tonnes, would 
hit crushers in China which have enjoyed government protection and 
multiplied in the past few years, they said. In theory, if China imported 
2.50 million tonnes of soyoil, it could kill soy imports of nearly 14 
million tonnes, were it not for demand for soymeal, they said.

Some traders also noted Beijing would try to restrict soy imports by 
traders or speculators, who were often behind large swings in domestic soy 
prices. "Crushers will continue to import. The government will not stop 
their cargoes from coming into China," another trader in Shanghai said. 
"But traders and importers might have to slow down their step. The total 
quantity would then come down." The trader added quarantines authorities 
now demanded now detailed informations on the destination of the imported 
cargoes. (Additional reporting from Niu Shuping in Beijing).


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