By Jacob Bunge
Archer Daniels Midland Co. sued Syngenta AG over losses the
grain trader and processor said it suffered after Syngenta sold
genetically engineered corn in the U.S. that had yet to win
approval in China.
ADM said Syngenta's push to sell its biotech corn to U.S.
farmers, without first securing Chinese import approval, led the
Asian nation to reject shipments of U.S. corn in the past year.
That caused "substantial economic losses and damages" for ADM, the
company said in a lawsuit filed in a Louisiana state court.
The Chicago-based company, which buys grain and oilseeds from
farmers and trades and processes them for buyers around the world,
said some of its corn bound for Chinese buyers was turned away or
seized after Chinese regulatory authorities detected the unapproved
biotech corn developed by Syngenta.
ADM's lawsuit escalates legal battles over Syngenta's Viptera
corn, which the company began selling in the U.S., Argentina and
Brazil in 2011. Commodities trader Cargill Inc. and Trans Coastal
Supply Co., another grain exporter, filed suits alleging
significant losses in September.
ADM alleged its losses arose from Syngenta's negligence in
managing the corn. According to ADM, Syngenta told the USDA it
would develop and enforce programs aimed at separating Viptera corn
from other varieties, to prevent it from finding its way onto ships
bound for countries like China that had yet to approve it. However,
ADM said, "Syngenta did none of this."
A Syngenta spokesman said the Swiss seed-and-chemical company
"believes that the lawsuit is without merit and strongly upholds
the right of growers to have access to approved new
technologies."
He said Syngenta was fully transparent in marketing the corn,
which it says provides tougher defenses against pests like corn
earworms and black cutworms. Viptera represents 30% of the
company's North American corn-seed sales.
ADM didn't specify in the lawsuit how much money it claims to
have lost due to rejected shipments and lost sales, though a
spokeswoman said the impact amounted to "tens of millions of
dollars in losses and added costs."
Lawsuits by farmers have been filed in more than 10 states since
then, blaming Syngenta for a sharp decline in U.S. corn exports to
China this year and lower prices for the grain.
The farmer lawsuits, some of which seek class-action status,
estimate more than $1 billion in losses for U.S. crop producers due
to China's refusal to buy U.S. corn after the first cargos were
rejected late last year.
U.S. corn exports to China plunged 87% to 189,000 metric tons in
the first nine months of 2014 compared with a year earlier,
according to U.S. Agriculture Department data. Last year, the Asian
nation accounted for about 15% of U.S. corn exports.
Corn futures prices have dropped about 14% this year as
expectations of another record U.S. crop grew. A bumper crop in
2013 drove prices 40% lower last year.
Some farmers and grain groups argue the drop in corn prices has
been exacerbated by excess grain on the market after China began
rejecting shipments.
ADM filed the lawsuit in Louisiana's 29th Judicial District
Court for the Parish of St. Charles. About two-thirds of ADM's U.S.
corn exports to China originated from the company's Louisiana
terminals, the company said in the lawsuit.
Write to Jacob Bunge at jacob.bunge@wsj.com
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