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7-Business: China gives long-awaited nod to Brazil soy imports



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TITLE:  China gives long-awaited nod to Brazil soy imports
SOURCE: Reuters, by Lee Chyen Yee
DATE:   Jan 28, 2003

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China gives long-awaited nod to Brazil soy imports

SHANGHAI - China said yesterday it has given long-awaited approval to
Brazilian soybean imports, throwing open a market worth more than $1
billion annually to the South American country.

The Brazilian embassy welcomed the news cautiously but said it was
waiting to see something on paper, which the market hopes will happen
before mid-February so that early shipments from Brazil could commence.

China's rules on imports of what it deems transgenic foods have held up
soybean trade with top producing countries such as the United States and
Brazil, which are eager to supply the world's biggest soybeans importer.

"We've given approval for Brazilian soybeans to enter China," an official
in the Chinese agriculture ministry's genetically modified organisms
(GMO) office told Reuters.

"We will start accepting applications after the Lunar New Year," the
official said, referring to the import permits soybean suppliers are
required to obtain. China celebrates the Lunar New Year break on February 1-7.

But Brazilian officials said approval from the GMO office was just the
first step, as actual trade would require the stamp of approval from
other senior officials, including the vice agriculture minister.

"Of course it's good news to us, but we haven't received anything
official yet," a Brazilian diplomat said in Beijing.

IMPORT PERMITS AWAITED

China implemented a raft of rules on importing GMO foods in 2001 that
virtually cut off soybeans trade with countries like the United States
and Brazil.

They required exporters to go through an arduous and confusing process of
applying for import permits. China extended those temporary import rules
- originally due to expire December 20 - to September 20, 2003.

But the rules required suppliers to re-apply for permits and producing
countries to prove their GMO crops were safe for the environment and for
human consumption.

Although Brazil's government officially bans transgenic crops, unofficial
estimates show that about 30 percent of its soy crop is bioengineered -
sparking worries that Brazilian beans might have problems entering China.

Traders had said they were worried China would be short of soybeans in
March, the end of the U.S. soybean season and the start of South America's.

China's approval of Brazilian beans might alleviate that potential
shortfall, although some traders remained sceptical.

They said it was possible buyers could switch a few cargoes to Argentina
from Brazil if import permits did not come swiftly.

"What does it really mean by "after Lunar New Year"? That could mean
right after February 7 or as far ahead as March," said a trader with a
global trading firm in Beijing.

"If we can get the Brazilian papers and start applying in mid-February,
then everything will still be manageable. But if it drags on until the
end of February, then the time will be very tight," he said.