China gives thumbs up to Syngenta's biotech corn

China has approved the import of biotech corn manufactured by Syngenta AG that sparked a flurry of recent lawsuits by Minnetonka-based Cargill Inc. and farmers across the country.

China refused to accept shipments of the corn from Cargill in late 2013, prompting shippers, farmers and others in the corn industry to sue Syngenta for losses caused by promoting and selling the corn in the marketplace too early — before China, a major importer, had approved it.

U.S. Agriculture Secretary Tom Vilsack told reporters Wednesday that Chinese Vice Premier Wang Yang informed him of the approval at a meeting this week in Chicago. Vilsack said the Chinese ministry of agriculture will now allow imports of the genetically modified corn, called Viptera, and two biotech soybean varieties made by Bayer AG and DuPont Co.

The change would open the doors for the U.S. to resume stronger corn trade with China, which has been a large buyer during the past few years until it began rejecting U.S. shipments with any traces of Viptera. Agriculture officials estimate that China's corn imports could hit a four-year low by next September unless the import ban is lifted.

Syngenta, a Swiss seed maker with its North American headquarters in Minnetonka, issued a brief statement on the matter. "We will make an announcement when we receive the official documentation, as is our standard practice," said company spokesman Paul Minehart in an e-mail Thursday.

The corn seed at issue contains a genetically engineered trait, MIR 162, to protect corn against damage from more than a dozen insect species such as the corn borer and corn rootworm.

Syngenta spent five to seven years and $200 million developing the trait, according to court documents. The company began selling it commercially to U.S. growers in 2011 as Agrisure Viptera, after approval by the U.S. Department of Agriculture in 2010.

Last November, Chinese authorities turned away U.S. corn shipments that Cargill was delivering because the cargoes contained traces of the Viptera corn. Cargill was able to sell the biotech corn to other countries that have approved Viptera, but it claimed $90 million in damages from the Chinese rejections.

A Cargill spokesman said in a statement Thursday, "We don't believe the approval will have a material impact on the lawsuit."

The National Grain and Feed Association estimated earlier this year that Chinese rejection of U.S. shipments also lowered domestic corn prices by 11 cents per bushel, leading to a projected loss of $1.14 billion for the last nine months of the marketing year that ended on Aug. 31.

Adam Levitt, a Chicago attorney representing farmers, elevator operators and others in Minnesota and several other states, said in an interview Thursday that the Chinese change in policy, whenever it is officially announced and implemented, does not mean that the litigation will be dropped.

"It's not a black-and-white thing where the [Chinese] market is opened and damages end," Levitt said. "There's a market reputation issue, there's a lost market question, and there's the overhang of the surplus of corn in the U.S. system as a result of the Chinese not accepting corn," he said.

Once the approval is formalized, it's not clear how much or how quickly China will resume purchases of U.S. corn. A bin-busting harvest in the U.S. has reduced prices, but China has boosted its own domestic corn production and reportedly is building large stockpiles.

Analysts said that China may move more quickly to resume imports of distillers' dried grains, the protein-rich fine corn that remains after ethanol production, and is highly valued for animal feed.