In March 2010 Syngenta applied for Chinese approval of its GMO corn seed MIR 162 but failed to obtain approval before this seed appeared in U.S. corn exports in 2013. China destroyed the seed and then turned around an entire shipment of U.S. corn. Both events resulted in the severe drop in the price of corn during the 2013 and 2014 crop years.
In December 2014 China finally granted approval to MIR 162, causing corn futures prices to spike, and reducing the number of crop years Syngenta will be sued for in these cases related to MIR 162. Both of these effects are beneficial for plaintiffs with GMO corn lawsuits against Syngenta.
In its August 31, 2007 “Petition for Determination of Nonregulated Status for Insect-Resistant MIR 162 Maize,” Syngenta promised the United States Department of Agriculture that its GMO strain MIR 162 would not be mixed in with other corn approved for export abroad:
There should be no effects on the U.S. maize export market since Syngenta is actively pursuing regulatory approvals for MIR 162 maize in countries with functioning regulatory systems for genetically modified organisms and that import maize from the U.S. or Canada…. Syngenta’s stewardship agreements with growers will include a term requiring growers to divert this product away from export markets (i.e., channeling) where the grain has not yet received regulatory approval for import. Syngenta will communicate these requirements to growers using a wide-ranging grower education program (e.g., grower Stewardship Guide). As noted in the context of the IRM program, these procedures are not hypothetical.
Although its made an application with the Chinese Ministry of Agriculture for approval of MIR 162 in March 2010, Syngenta failed to receive approval from China for MIR 162, and therefore knew its GMO corn could not be exported there.
The appearance of MIR 162 in U.S. corn exports first resulted in the destruction of shipments by China. On June 10, 2013, Ethan A. Huff, a staff writer for the Natural News, a digital agricultural magazine, posted a story entitled “China Destroys Multiple Shipments of GM Corn from U.S.” In the story, Huff reported “several large shipments of genetically-modified (GM) corn and corn seeds originating from the U.S. have been destroyed by the Chinese government after being discovered by import officials at numerous locations across the country. At least three shipments of GM corn detected at the Wanzai Port in Zhuhai City near Macau were reportedly destroyed after being successfully intercepted by government officials. Then another 21 cartons of GM corn seeds weighing more than 250 pounds were destroyed in the northern Chinese city of Harbin.” The price of corn began to drop precipitously immediately following the publication of Huff’s article, falling from $7.00/bushel in June to $4.25/bushel by November 2013.
On November 19, 2013, Reuters reported that China later turned around an entire shipment of U.S. corn, resulting in the further swift drop in the price of corn during the 2013 and 2014 crop years. As Reuters observed, “the discovery of Syngenta AG’s Agrisure Viptera corn in the shipment dragged on global prices and unnerved some Chinese buyers as it raised the spectre of other rejections.” On December 20, 2013, the Wall Street Journal reported that “China has blocked an unprecedented amount of U.S. corn imports this year for violating its ban on certain types of genetically modified food, illustrating the difficulty big biotechnology companies face in tapping the country’s potentially vast market.” The story specifically reported “China’s quality watchdog said Friday that it has repatriated 545,000 metric tons of U.S. corn so far this year in cargoes that contained MIR162.”
Between December of 2013 and June of 2014, several million metric tons of U.S. corn were rejected by trading partners of the U.S., sending the price of corn further downward to approximately $3.25/bushel.
On December 12, 2014, a Sygenta spokesman announced that “we expect to be granted Chinese approval of Agrisure Viptera (MIR 162) in the near future.” The Dow Jones Business News reported this news in a story posted that day entitled “Syngenta Expects Chinese Approval for Viptera Corn in Near Future.” On December 16, 2014, Reuters subsequently reported that “Chinese officials informed some U.S. seed industry officials that they approved Syngenta AG’s genetically modified corn, Viptera.” Corn futures spiked immediately, and as the internet postings of AgResource Company observed, “[t]he China MIR 162 approval helps explain why US corn prices surged in the past 2-3 weeks to levels that are extreme by any fundamental analysis.”
Chinese approval of Syngenta’s GMO Corn Seed is helpful for Plaintiffs
The Chinese approval of MIR 162 on December 16, 2014 is helpful for two reasons. First, it caused corn futures to spike, further evidencing the relationship between Chinese approval and price fluctuations of corn. Second, in negotiating the GMO Rice settlement, lengthy negotiations occurred between my firm and Bayer with respect to the number of crop years affected by Bayer’s conduct. Here, China’s approval has reduced the number of crop years Syngenta will be sued for in these cases with respect to MIR 162.
Although MIR 162 has now been approved by China, there is plenty of opportunity to recover losses from previous crop years.
* This information is provided to supply relevant information concerning the GMO corn lawsuit, and should not be received as legal advice. Legal advice is only given to persons or entities with whom Watts Guerra LLP has established an attorney-client relationship. If you have another lawyer in the GMO Corn lawsuit, you should consult with your own attorney, and rely upon his or her advice, rather than the information contained herein.