(Bloomberg) -- China approved a new strain of genetically modified soybeans developed by a U.S. company, a move that could bolster looming trade talks.
The variety approved for import is an insect-resistant soybean from Dow AgroSciences LLC, according to a list published by China’s agriculture ministry on Monday. The nation also approved a new type of GMO papaya and renewed permits for 10 crop varieties, including corn and canola.
China and the U.S. are gearing up to sign the first phase of a trade deal, with the South China Morning Post reporting Chinese Vice Premier Liu He is set to lead a delegation to Washington on Jan. 4. The countries agreed to speed up the approval process for imports of GMO crops as part of efforts to boost bilateral trade.
“The news helps confirm China’s opening of its market to U.S. GMO products and dropping additional non-tariff barriers,”said John Payne, senior futures and options broker at Daniels Trading in Chicago.
GMO crops have been a source of tension with the U.S. arguing China’s stance isn’t based on science and has been used as a non-tariff barrier. In 2013, China rejected several cargoes of corn and distillers dried grain from the U.S. due to the presence of a GMO variety that took the Asia nation almost five years to approve, said Darin Friedrichs, a senior analyst at INTL FCStone in China.
The papaya strain, which is resistant to some viruses, has been genetically altered by U.S. research institutes. Import permits for 10 strains, developed by companies including BASF SE, Dupont Pioneer and Bayer AG’s Monsanto unit, have been renewed. These varieties, including one strain of corn, four of soy and four of canola, will be permitted for imports until December 2022.
China purchases more than 60% of globally traded soybeans, mainly from Brazil and the U.S., and is also the largest importer of canola, especially from Canada. The oilseeds are processed into protein-rich meals to meet demand for livestock feed. The Asian country is the second-largest corn consumer.
“All things point to fantastic Chinese demand in the future which should buoy the commodity complex,” Payne of Daniels Trading said.
Soybean futures for March delivery rose 1.2% to close $9.525 a bushel on the Chicago Board of Trade on the bullish outlook for a trade deal. That marked the contract’s highest settlement since Oct. 24.
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