Imports of US gluten feed to the European Union have been virtually stopped because of concern they might contain unapproved genetically modified organisms (GMOs), traders and industry associations said to Reuters.
"Corn gluten shipments from the US are at a standstill," one trader said. "The problem of unapproved GMOs is preventing business taking place."
The EU imported about 1.0 million tonnes of corn gluten feed in the Sept. 2010/Oct. 2011 crop season, German analysts Oil World estimates.
This is small compared to 24 million tonnes of soy meal and 13 million of soybeans imported for animal use, but the loss of 1 million tonnes will be painful to the feed industry which traditionally works with tight profit margins.
The EU is reliant on imports of about 30 million tonnes of GMO animal feed each year and is compelled to legalise imports of new GMO crops to secure farm feed supplies.
As of August this year 37 GMO crops were approved for import into the EU for either human use or animal feed, according European biotech association EuropaBio. However, 90 have been approved for markets in the United States.
With consumer resistance strong, the EU approval process for new GMO crops is much slower than in the US and South America. This has disrupted international trade as American farmers grow and market new GMO crop types which are unapproved in the EU and so illegal to import.
"As yet another GMO corn event (crop type) has been approved in the U.S. and not yet in Europe, trading houses are not importing corn gluten in case the new variety appears in large volumes and the ship gets refused permission to unload," another trader said.
Traders say the latest problem is with the new GMO corn of type MIR162 Agrisure Viptera from Swiss group Syngenta which was approved for cultivation in the US in 2010 but is unapproved in the EU.
Small contamination amount allowed
To avoid disruptions to animal feed imports, the EU this year adopted rules allowing tiny amounts of 0.1% of unapproved GM crops in shipments often picked up in transport.
"Traders are not taking the risk because the 0.1 tolerance level is a step in the right direction but it is too low," said Teresa Babuscio, secretary general of European grain trade association Coceral.
"We are seeing that shippers are not ready to take the risk of a trade blockage here with cargoes being stopped or rejected at European borders," said Alexander Doering, secretary general of the European feed manufacturers Federation Fefac. "The main direct alternative would be rapeseed meal which is the product feed compounders will be looking towards."
Doering stressed that the loss of the corn gluten imports would not cause a major supply shortage but 1 million tonnes was a significant market volume.
"Overall it is clear that because of GM laws here restricting supplies, this translates into higher costs for feed producers," Doering said.