China rolls out GMO corn planting, starts small

China will likely plant less than 1% of its corn fields with genetically modified varieties this year, said two people familiar with the plans, dashing hopes for a full market launch of the technology in the world's second-largest corn market.

The agriculture ministry has designated around 4 million mu (267,000 hectares or 660,000 acres) to be planted with genetically modified or GMO corn this year, said a senior manager at a Chinese seed developer briefed on the plans.

Several varieties will be planted in certain counties of Inner Mongolia, Jilin, Hebei and Yunnan provinces, he said, declining to be identified because the plan is not public.

China has studied GMO food crops for decades but has never permitted them to be planted because of opposition to the technology, although it allows imported GMO soybeans and corn for use in animal feed and the planting of GMO cotton.

The slower-than-expected rollout is disappointing to seed companies that were expecting to boost revenues in a fragmented, highly competitive market. It also comes as an economic recovery is expected to increase China's demand for corn to feed the world's largest pig herd.

"It's a large-scale trial, not a fully fledged commercial release," said a second industry source who has also been briefed on the plans.

The Ministry of Agriculture and Rural Affairs did not respond to a request for comment. China planted about 43 million hectares of corn last year, producing a crop of 277 million tonnes, according to official data.

Despite official wariness over GMO crops, there is huge demand for hardier, high-yield grains. In China's breadbasket in the northeast, illegally sown GM corn makes up about 70% of the acreage, according to a state media report in 2021.

Analysts at Citic Securities and Tianfeng Securities said in recent notes they expected a commercial release of GMO corn varieties this spring.

"We expected at least three or four times more," said the seed company manager, referring to the acreage.

The plans could still change, said both sources, although planting typically starts in about two months and farmers are already buying seed.

Companies with GM corn technology approved as safe by Beijing include Beijing Dabeinong Technology Group Co Ltd (002385.SZ), Syngenta Group and Yuan Longping High-tech Agriculture Co Ltd (000998.SZ). Foreign companies are not allowed to sell GMO seed in China.

Dabeinong and Yuan Longping declined to comment. Syngenta could not immediately comment.

Shares in the seed companies fell this week after remarks in a 2023 rural policy document published by China's cabinet were taken as an indication of a more controlled release of GMO technology.

Dabeinong told investors last year it expected royalties between 8 yuan and 10 yuan for each mu planted in its GMO corn.

PRESIDENT XI'S SUPPORT

China's corn fields yield only about 60% as much corn on average as in top producer the United States, where GMO corn makes up more than 90% of the crop.

President Xi Jinping, however, has increasingly supported use of the technology, which he says is crucial to bolstering China's food security. Trade tensions, erratic weather and war in major corn exporter Ukraine have increased official worry over feeding the country's 1.4 billion people.

Beijing has approved the safety of 14 corn "events", or genetic changes, since 2019 and implemented new regulations to support the technology, signalling a change in its longtime cautious attitude to GMOs.

But China's cabinet said in its policy document that China - despite speeding up commercialisation of GMO corn and soybeans - would "orderly expand the trial area and regulate the management of planting," comments taken as indicating a careful approach.

"The whole plan is to make sure there are no problems," said the second source.