The move comes after Beijing last month proposed an overhaul of regulatory seed rules to pave the way for approval of GMO crops and as top policy makers urged progress in biotech breeding, seen as key to ensuring food security.

The three new corn products include ND207 produced by China National Tree Seed Corp and China Agricultural University, Zheda Ruifeng 8 made by Hangzhou Ruifeng Biotech Co and DBN3601T from Beijing Dabeinong Biotechnology Co, according to the notice posted on the website of the Ministry of Agriculture and Rural Affairs.

The plan to approve the new corn varieties, along with seven new GMO cotton products, will be open for public comment until Jan. 17, the ministry said.

The DBN3601T corn is an upgraded variety from DBN9501 and DBN9936, two corn traits owned by Dabeinong Biotech, parent company Dabeinong Technology Group Co said in a statement.

Dabeinong will work with partners to get ready for the commercialization of the product, and prepare inventories of the variety, Dabeinong Technology said.

The new variety, combining traits from both DBN9501 and DBN9936, will have stronger resistance to a wider range of insects, especially the fall armyworm, according to a statement released on the company’s website.

Safety approval is seen as a major step towards commercialization of GMO crops, but it is still unclear when the new products will be ready for a market launch.

Beijing has so far not permitted the planting of GMO soybean or corn varieties, but it allows their import for use in animal feed.

Both Hangzhou Ruifeng, in which Yuan Longping High-Tech Agriculture Co Ltd owns 41.8 percent, and Beijing Dabeinong already own GMO corn traits approved as safe by the government.

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“There are very unfair rules in the agriculture sector, and enormous subsidies some developed country members are entitled to, that severely distort international agricultural trade,” Wang Shouwen, vice minister of China’s Ministry of Commerce, told a press briefing.

Agricultural subsidies allowed for developing countries, however, are capped at 10 percent of the value of production and have “very limited impact” on trade, added Wang, yet are vital for ensuring grain supply and food security.

WTO members including the United States have, however, long complained about China’s agricultural subsidies, with Washington winning a case against Beijing’s price support for grains in 2019.

Wang also addressed issues raised by major trade partners at a recent policy review and said China took the concerns seriously. But it did not accept criticism on issues that fell outside the scope of its WTO commitments.

“We understand hopes from other countries that China should further relax its entry barriers for investment, but using this to criticise China and claiming China has not fulfilled its duties under WTO is not reasonable, fair or acceptable,” he said.

The government is willing to negotiate at the WTO or through bilateral investment deals to resolve such concerns, Wang said, adding that China has applied to join the Comprehensive and Progressive Agreement for Trade Pacific Partnership (CPTPP).

The United States said last week that China’s industrial policies “skew the playing field” against imported goods and services, as well as their foreign providers, and that Washington would pursue all means to secure reforms.

China’s other major trading partners – including Australia, Britain, Canada and the European Union – also called for the world’s second-largest economy to further open its vast markets.

China risks slower growth if it does not do enough to spur market competition, a report showed this month.

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Many different strains of bird flu are present in China and some sporadically infect people, usually those working with poultry. There is no indication that H10N3 can spread easily in humans.

The man, a resident of the city of Zhenjiang, was hospitalized on April 28 and diagnosed with H10N3 on May 28, the health commission said. It did not give details on how the man was infected.

His condition is now stable and he is ready to be discharged. Investigation of his close contacts found no other cases, the NHC said. No other cases of human infection with H10N3 have been reported globally, it added.

H10N3 is low-pathogenic, which means it causes relatively less severe disease in poultry and is unlikely to cause a large-scale outbreak, the NHC added.

The World Health Organization (WHO), in a reply to Reuters in Geneva, said: “The source of the patient’s exposure to the H10N3 virus is not known at this time, and no other cases were found in emergency surveillance among the local population. At this time, there is no indication of human-to-human transmission.

“As long as avian influenza viruses circulate in poultry, sporadic infection of avian influenza in humans is not surprising, which is a vivid reminder that the threat of an influenza pandemic is persistent,” the WHO added.

The strain is “not a very common virus,” said Filip Claes, regional laboratory co-ordinator of the Food and Agriculture Organization’s Emergency Centre for Transboundary Animal Diseases at the regional office for Asia and the Pacific.

Only around 160 isolates of the virus were reported in the 40 years to 2018, mostly in wild birds or waterfowl in Asia and some limited parts of North America, and none had been detected in chickens so far, he added.

Analyzing the genetic data of the virus will be necessary to determine whether it resembles older viruses or if it is a novel mix of different viruses, Claes said.

There have been no significant numbers of human infections with bird flu since the H7N9 strain killed around 300 people during 2016-17.

— Reporting for Reuters by Hallie Gu and Dominique Patton; additional reporting by Julie Steenhuysen in Chicago and Stephanie Nebehay in Geneva.

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The move comes after China last year approved three domestically designed GMO crops as safe, the first in a decade, in a fresh push toward commercial planting of GMO crops in the world’s top soybean importer and a major corn buyer.

Beijing has never permitted planting of GMO soybean or corn varieties but it permits their import for use in animal feed.

The government has said recently, however, that it wants to support biotech breeding to boost food security, leading the industry to expect progress toward commercialization in the coming year.

The ministry of agriculture and rural affairs has opened its plan for safety approval for public comment until Feb. 1.

One of the new products, a glufosate and glufosinate-resistant soybean known as DBN9004, has already been approved as safe in Argentina, where Dabeinong is also seeking commercial production.

The other, known as DBN9501, is a corn resistant to the fall armyworm pest, which last year reached China’s cornbelt region.

Dabeinong could not be reached for comment.

Though several further steps must be taken before farmers in China are allowed to plant the crops, the approval is seen as timely given a growing corn deficit in the world’s top grain grower.

“The arrival of GMOs can bring an increase in production efficiency,” said Mao Yifan, analyst at Industrial Securities.

The ministry also said on Monday it had approved two new GMO corn varieties for import, the glyphosate- and insect-resistant MON87411 sold by Bayer’s CropScience unit, and MZIR098, produced by Syngenta.

The two corn varieties have been approved in Canada since 2015 and 2016 respectively.

“We appreciate the approval of an existing product,” said Holger Elfes, a spokesman for Bayer.

“Syngenta Seeds is pleased to receive import approval from China for our innovative corn, which successfully combats corn rootworm, a scourge of farmers,” said Saswato Das, spokesman for Syngenta, a unit of China’s state-owned ChemChina.

— Reporting for Reuters by Dominique Patton and Hallie Gu; additional reporting by John Revill in Zurich. Includes files from Glacier FarmMedia Network staff.

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“China has been importing a large quantity of meats this year, and has detected virus on the packaging of cold chain products many times, even as lots of disinfection has been done domestically,” Gao Guan, spokesman for the China Meat Association, said by telephone on Tuesday.

“It should be better to handle this (virus control) at the meats exporting origins, and carry out disinfection at the production plants,” as the cost would be lower, and efficiency higher, Gao added.

China has ramped up disinfection and virus testing on frozen food after it found coronavirus on imported products and packaging.

The measures have pushed up costs, disrupted trade, and irritated major exporters.

The semi-official industry body suggested exporters in COVID-19 hit countries should disinfect the outer packaging of products and the inner side of containers before sealing export products, a statement published on the association’s official WeChat account said at the weekend.

The initiative was proposed to “ensure the safety of imported cold-chain food and boost consumers’ confidence in imported cold-chain products,” the statement said.

The proposal came after some major exporters, including JBS in Brazil, started to take measures including extensive disinfection of products and storage sites, to supply China with safe products, Gao said.

Reported cases have shown that contact with packaging contaminated with coronavirus could lead to human infection, said the Chinese association.

The World Health Organization has said the risk of catching COVID-19 from frozen food is low. Chinese officials echoed that such risk was low, but there was still a risk.

“The virus is new. We are still accumulating experience when fighting against it,” Gao said.

“We should get together and discuss how to use the most scientific, efficient and low-cost way to secure public health, and trade at the same time,” Gao added.

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Fresh supplies of beef won’t arrive for days, a salesman at the Suning.com-owned Carrefour outlet told Reuters — if then. That’s a big setback for the industry at traditionally one of its busiest times of the year.

“Whether we can get supplies then, and how much, remains a question,” said the sales person, who declined to be identified as he was not allowed to talk to media.

Suning did not immediately respond to a request for comment.

China began testing batches of imported chilled and frozen meat and seafood for the coronavirus in June, but significantly ramped up its inspections early this month after port workers in several cities tested positive for COVID-19, the disease caused by the virus.

The new measures, which include testing much more product than before and additional disinfection, are raising costs for importers while adding time and layers of red tape in an industry used to working at speed to guarantee freshness.

The move is especially hurting the booming beef trade, worth US$8.65 billion last year and growing rapidly, as some importers cut purchases on rising costs and weaker demand caused by consumers’ coronavirus worries.

Though China says the risk of shoppers catching the virus from chilled foods is low, officials said this week there is still a risk of infection, particularly for handlers who repeatedly come into contact with the outer packaging of imported cold-chain food.

In Tianjin, northern China’s most important port for meat shipments, the trade has come to a virtual halt, after a worker tested positive for the coronavirus earlier this month.

Warehouses were ordered to test all frozen meat before it could be shipped to the market, and no new product can enter, three importers told Reuters.

Three out of five supermarkets in Beijing visited by Reuters this week were short of beef.

A salesperson at Meat Mate, a restaurant and retailer selling chilled Australian beef, said it now needs to place orders three months in advance, instead of one previously, to deal with the delays. Nobody at Meat Mate’s headquarters could be reached for comment.

Now Beijing’s Xinfadi wholesale market, linked to a coronavirus outbreak in June, has also suspended sales and storage of cold-chain and aquatic products, state media reported this week.

Demand dips

Growing concerns about catching COVID-19 from frozen product has dented demand too.

“Orders for imported beef have halved for us as our clients have got concerned about COVID recently,” said a beef trader in Tianjin.

“They ask us when the products were shipped and whether they have been tested when placing the orders. We have been selling lots of domestic products lately,” she added.

Testing and the additional time product sits in warehouses has driven up costs for importers by as much as 200 per cent, traders said.

A beef importer based in southwestern China said he has reduced imports to less than one quarter of the volumes of previous years even as China enters its peak demand season ahead of the New Year and Lunar New Year holidays.

“What if your cargoes get hit (with the virus)? It will be huge trouble. I’d rather import less,” said the importer surnamed Fu.

Slower imports come as China’s domestic pork production recovers from a severe disease outbreak and prices fall from record highs.

With more domestic meat being produced and the local economy also slowing due to the global coronavirus pandemic, beef demand was already taking a hit, said Grace Gao, manager at Goldrich International, a beef importer in Dalian.

Many beef importers have also had to deal with the impact from souring trade relations with key beef supplier Australia.

After cutting back on Australian purchases, Fu is now reducing imports from other origins too, including Brazil, Argentina, and Belarus.

“This year has been really miserable,” he said.

— Reporting for Reuters by Hallie Gu, Beijing newsroom and Dominique Patton.

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Chinese authorities have since March 2019 blocked canola shipments by two Canadian exporters, an action they took after Canadian police detained a Huawei Technologies executive in late 2018 on a U.S. warrant.

The dispute, however, has not spoiled China’s appetite for canola, which is mainly processed into vegetable oil. While China is buying less from Canada directly, it has bought canola oil instead from Europe and the United Arab Emirates, with some of that oil made from Canadian canola, traders said.

ICE canola futures on Tuesday last week hit the highest nearby price since October 2018. Prices of China’s rapeseed oil, another name for canola oil, have also rallied, partly because of limited Canadian supply.

“Profits are extravagant. Anyone who has the resources to import (canola oil) will definitely buy,” said a manager with a China-based canola importer.

“It is like gold oil now.”

Canadian canola exports to China fell 45 per cent year over year during the 11-month period through June, however total canola exports have jumped nine per cent, helped by a tripling of sales to France and double the shipments to the UAE.

Canada is the world’s biggest canola producer, and the yellow-flowering plant earned farmers $8.6 billion last year, the most of any crop.

China, meanwhile, boosted canola oil imports from Europe, Russia and Australia, with some of that oil made from Canadian canola, said another China-based trader.

The price rally left farmer Mary-Jane Duncan-Eger, who grows canola near Regina, “super-mystified,” considering that Canada is heading for a bumper crop.

To lock in high prices, she pre-sold 50 per cent of her anticipated harvest, up from the 30 per cent she usually pre-sells at this time of year.

“I’m pretty happy. As long as someone is buying it, I don’t care who.”

Global canola oil demand has prompted Canadian crushers — who include Archer Daniels Midland and Bunge — to process canola at a brisk pace, said Brian Comeault, commodity risk manager with Cargill’s Canadian marketing service MarketSense.

Exporters are also selling more seed to the UAE, where crushers produce oil to sell to China, he said.

Bad crop weather and insect attacks in Europe have also lifted prices.

Rapeseed production in the European Union and Britain is expected near the 13-year low seen in 2019.

This has led European importers to scour other countries for supplies, especially those with weaker currencies that make purchases more profitable, consultancy Strategie Grains said in a report.

“Canadian canola has the biggest edge,” it said. “Competition among importing countries will probably be fierce over the coming months.”

— Reporting for Reuters by Rod Nickel in Winnipeg, Hallie Gu in Beijing, Gus Trompiz in Paris and Michael Hogan in Hamburg.

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The move by the National Development and Reform Commission comes as China, the world’s top meat market, strives to boost supplies of meat and alternative proteins to plug a major pork shortage after African swine fever decimated its massive pig herd.

China’s pig producers have ramped up imports of foreign breeding pigs to rebuild a sow herd that had fallen as much as 60 percent due to the deadly disease.

Major international players and local firms alike are already moving to develop and sell plant-based protein products to the China market.

– Additional reporting by Tom Daly.

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That could eventually lead to Chinese-backed hog farms in the South American nation more famed for its cattle-rearing grasslands, at a time when Beijing is looking to diversify pork supply after domestic farms were hit hard by African swine flu.

Pablo Sivori said a memorandum of understanding could be signed with China in the coming weeks. The country’s foreign minister Felipe Sola said earlier this month Chinese investment could help Argentina massively increase pork output.

“We have already agreed on the content of the memorandum,” Sivori said, adding that the foreign ministry had asked the Chinese government to sign the document virtually.

He added the planned MOU came after a process initiated by the private sector, and would involve frameworks for investment in Argentina, along with cooperation in areas of health, scientific and technological research related to the sector.

Argentina is already a major beef supplier to China, but a bit-part player in the global pork market. According to official data, in 2019 it produced 630,000 tons of pork, of which just 34,000 tons were exported.

However, the prospect of Chinese interest has sparked wild dreams of growth possibilities. Foreign Minister Sola said this month that Argentina could produce a lofty 9 million tons of pork with Chinese backing, over 14 times current levels.

In March, Beijing urged China’s pork companies to invest in supply chains abroad to import due to the devastating effects of the African swine fever on Chinese herds.

China’s agriculture and commerce ministries did not respond to requests seeking comment.

Lisandro Culasso, head of the Argentine Association of Pig Producers (AAPP) there was “Chinese interest” in the country, though any investments would depend on the signing of a memorandum between the two countries.

Experts on both sides however threw cold water on the idea Argentine pork production could scale-up quickly.

Sivori said sanitary production measures established by local authorities would need be followed, meaning the country could only gradually double production within around four years.

An executive with a Chinese firm that has invested in animal farming sector overseas added that Argentina was a “quite risky” place to invest given local market volatility and the physical distance with China that would make shipping live pigs tricky.

“It is more feasible to ship frozen pork than live pigs for sure, but that also means you need to have a more extensive production chain there, and manage labor-intensive slaughterhouses in Argentina,” he said.

“Just the idea alone can drive you crazy.”

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Large-volume state purchases of U.S. corn and cotton have also been put on hold, one of the sources said.

China could expand the order to include additional U.S. farm goods if Washington took further action, the people said.

“China has asked main state firms to suspend large scale purchases of major U.S. farm products like soybeans and pork, in response to U.S. reaction to Hong Kong,” the source said.

“Now we will watch and see what the U.S. does next.”

U.S. President Donald Trump said on Friday he was directing his administration to begin the process of eliminating special treatment for Hong Kong, ranging from extradition treatment to export controls, in response to China’s plans to impose new security legislation in the territory.

China is ready to halt imports of more agriculture products from the United States if Washington takes more action on Hong Kong, the sources said.

Chinese importers have cancelled 10,000 to 20,000 tonnes of American pork shipments — equivalent to roughly one week’s orders in recent months — following Trump’s comments on Friday, the source said.

State purchases of bulk volumes of U.S. corn and cotton have also been suspended but the details were not clear.

In a worst case scenario, if Trump continues to target China, Beijing will have to scrap the Phase One trade deal, a second source familiar with the government plan said.

“There’s no way Beijing can buy goods from the U.S. when receiving constant attacks from Trump,” the person said.

China pledged to buy an additional $32 billion worth of U.S. agriculture products over two years above a baseline based on 2017 figures, under the initial trade deal the two countries signed in January (all figures US$).

China has bought soybeans, corn, wheat and soyoil from the United States this year, to fulfil its commitment under the trade deal. Beijing also stepped up purchases of U.S. pork, after the deadly African swine fever decimated its pig herd.

The U.S. Department of Agriculture reported that China bought $1.028 billion worth of soybeans and $691 million of pork in the first quarter of 2020.

Private importers haven’t received a government order to suspend buying of U.S. farm produce, according to a third source with a major trading house, but commercial buyers are very cautious at the moment, the person added.

“A certain scale of trade will be halted,” given rising tensions between China and the U.S. in other areas, but it is not a full stop, said a fourth source familiar with government plan.

However, China would be able to find other sellers easily (of the farm products), he added.

The sources all declined to be named due to the sensitivity of the matter.

— Reporting by Hallie Gu, Jing Xu in Beijing and Keith Zhai in Singapore; additional reporting by Dominique Patton and Gavin Maguire.

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