Chicago | Reuters — Cargill, the top U.S. grain exporter, sued a unit of Syngenta in a Louisiana state court on Friday for damages stemming from China’s rejection of genetically modified U.S. corn, which Cargill said cost the company more than US$90 million.
Minnesota-based Cargill accuses Syngenta of exposing the grain trader to losses by selling the seeds to U.S. farmers before the Swiss company had secured import approval from China, a major buyer.
The Agrisure Viptera corn variety known as MIR 162 can be found throughout the U.S. corn supply, effectively closing the lucrative Chinese market to U.S. supplies, the lawsuit said.
Cargill is suing Syngenta for negligence; knowing, reckless or willful misconduct; and unfair trade practices.
The lawsuit seeks to hold Syngenta responsible for “deliberate, knowing and continuing contamination of the U.S. corn supply with a product that it understood all along would substantially impair the U.S. grain industry’s ability to sell corn and other commodities to buyers in China,” according to Cargill’s filing.
Since November, China has rejected imports of hundreds of thousands of tonnes of U.S. corn, including from vessels loaded by Cargill in Louisiana, due to the presence of the MIR 162 trait, according to the lawsuit.
Syngenta, the world’s largest crop chemicals company, said in a statement that the lawsuit was without merit.
Trade disruptions have cost the U.S. grain industry up to US$2.9 billion, according to an estimate by the National Grain and Feed Association (NGFA), which was not immediately available for comment about the lawsuit.
In April, Cargill said the rejection of U.S. corn shipments by China had contributed to a 28 per cent drop in its earnings for the quarter ended Feb. 28.
“I want to be clear about this: Cargill is a supporter of innovation and the development of new GMO seed products,” Cargill AgHorizons’ U.S. chief Dave Baudler said in a company release Friday.
“But we take exception to Syngenta’s actions in launching the sale of new products like MIR 162 before obtaining import approval in key export markets for U.S. crops. Syngenta’s actions are inconsistent with industry standards and the conduct of other biotechnology seed companies.”
Cargill said filing the suit came only after talks with Syngenta “proved unproductive.”
— Tom Polansek and Karl Plume report on agriculture and ag markets for Reuters from Chicago. Includes files from AGCanada.com Network staff.