Well, that's that. Within a week of two grain processors telling biotech Syngenta (NYSE:SYT) they won't accept delivery of corn that's genetically modified with the Duracade trait, two more processors have delivered the coup de grace and said they'll also refuse its delivery. It's clear Syngenta has little hope of ever getting this seed commercialized now.
Last week, both Bunge (NYSE:BG) and Cargill said that with China refusing to accept the GM corn, they wouldn't accept it for export, either. While the FDA has signed off on the genetic engineering making this year's crop the first one to be planted with the trait, the largest export markets haven't signed on, and where smaller markets might accept the crops, the risk of contaminating shipments to China and the EU is simply too large to take.
Now both Archer Daniels Midland (NYSE:ADM) and Consolidated Grain and Barge, a subsidiary of ITOCHU, a Japanese import-export company that operates grain elevators and bulk handling facilities in the Midwest and is also a big shipper of grain on the Mississippi River system, have joined the chorus saying they, too, will not accept Syngenta's Duracade corn. ADM went even further suggesting that farmers who bought seed that's not accepted for export by all trading partners to try to exchange it.
So far only Marubeni's Gavilon grain trading division has said it will accept Duracade crops, essentially leaving only Louis Dreyfus as the remaining major exporter that has yet to say yea or nay. With the vast bulk of the industry going against Syngenta, though, it seems likely that it too will err on the side of caution in accepting such crops.
In December, China refused acceptance of 665,000 metric tons of corn and byproducts because it tested positive for the presence of Syngenta's Agrisure Viptera, a genetically modified insecticide that's also not approved in many areas. The problem with the Viptera trait is that it becomes concentrated when the corn is refined for ethanol. It gives the resulting distillers dried grains with solubles (DDGS) excessive levels of the protein. Bunge and Consolidated haven't accepted Viptera either, and though Syngenta sued Bunge for doing so, a court ruled it was a valid and reasonable business decision for it to make.
As the wheels come off Syngenta's GMO corn, Monsanto may see similar fallout particularly as France seems ready to ban once again its MON 810 maize as well as impose new restrictions on Pioneer 1507, a GM maize developed by DuPont and Dow Chemical. Russia is pondering whether to simply ban all GMO crops.
With the industry almost completely arrayed against it, Syngenta has little hope of seeing its Duracade trait become a commercial success. Farmers have little incentive to plant the crop now and if foreign markets continue to reject its lab creations, there will be fewer reasons for the biotech to create them. Having once proclaimed all was well, Syngenta's wall of denial seems to be crumbling around it.
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