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No export effect likely from Mexican GMO ban

Staffers at the U.S. Grains Council in Washington, D.C. were getting calls Wednesday from commodities traders after a report was posted on the activist social media website, Care2, that "Mexico Bans GMO corn, effective immediately."

A ruling by a judge in Mexico's Federal District suspending the planting of genetically modified corn in that country was reported by Mexican media last Thursday, October 10.

"The issue at hand relates to cultivation," Andrew Conner, manager of global technology for the U.S. Grains Council told Wednesday. "We've been tracking this for quite a while to make sure it doesn't spill over into trade barriers."

"In the case of Mexico, we have no reason to believe that what is happening now, with the ruling of the judge, will spill over and affect imports," Conner said.

The Mexican government has already approved all genetically modified corn grown in the U.S. for import into its country, he said.

Mexico usually ranks second behind Japan as the largest export market for U.S. corn.

The release of genetically modified corn is a controversial issue in Mexico, the birthplace of corn. It is the home to scores of traditional corn varieties as well as its wild grass ancestor, teosinte. And scientists have found low levels of modified genes in native corn, even though a moratorium on planting genetically modified corn has been in effect since 1998.

The Mexican government has been moving toward approval of planting genetically modified corn in an effort to increase the crop's production in a nation that imports almost a third of the corn it consumes, mostly for livestock feed.

Last July, a coalition of 53 groups and individuals, including scientists, activists and human rights groups, filed suit to block field trials of genetically modified corn planned by most of the major international corn seed companies in Mexico.

The ruling, which is a suspension, was considered a major victory for the groups because it was the first time Mexican courts were willing to weigh in on the debate over risks and benefits of the technology.

The judge cited the risk of imminent harm the environment as the basis for his decision.

Mexico's Secretary of Agriculture, Enrique Martinez y Martinez, told the newspaper, El Economista, that the agriculture department has always planned to base its decisions regarding the field testing of genetically modified corn based on scientific criteria. But, the delays and litigation is now in the hands of attorneys and, for the moment, there will be no more permits.

Depending on how the litigation plays out, and whether it becomes a trade issue, this latest development may actually increase U.S. corn exports to Mexico.

"At the end of the day, they use lower yielding corn seeds and need to import more U.S. corn," Tim Hannagan, Walsh Trading, Inc. grain analyst said in an email to marketing editor Mike McGinnis

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