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Brazilian state rejects GM soybeans at port

(Monday, March 8, 2004 -- CropChoice news) -- OsterDow Jones, 03/04/04: SAO PAULO, Brazil -- Brazil's Parana is enforcing its ban on exports of genetically modified soybeans through Paranagua, Brazil's main grain port, sending away some 200 trucks with traces of GMOs in their loads, a port authority spokeswoman said Wednesday.

The port authority is testing all soybean loads for GMOs on arrival at the port, rejecting approximately 2% of all soy trucks from the burgeoning 2003-04 harvest, although soymeal loads were free to pass.

"We have seen the number of contaminated truck loads fall in the last few days as exporters see that any level of GMO will not be tolerated," she told OsterDowJones.

Earlier this week, Parana State Governor Roberto Requiao reemphasized it would ban all exports of soybeans with traces of GMO, rejecting a federal government and farm-sector proposal of a tolerance level of 0.9%.

Amid fears of rejected trucks, major exporters have sought to avoid sending bean exports from Paranagua this season. But last year the port shipped 5.8 million metric tons, or around 28%, of all Brazilian exports, and they will be forced to use the port.

For the first time this year, Brazilian farmers were able to plant and sell GMO soybeans, exclusively for the 2004-05 season, but Parana then passed a state law banning GMOs.

This law was overturned by the Supreme Court, but the state has chosen to maintain GMO restrictions at the port.

Exporters have attempted -- with no success -- to convince Requiao that the ban will cause chaos once the bulk of Brazil's record soybean crop begins to arrive at port from next week.

"Requiao doesn't care about Parana business. This is a politically motivated, populist action, and he seems determined to fight with the multinationals," said one Sao Paulo-based trader at a multinational grains firm.

Meanwhile, the federal government seems unwilling to intervene in the situation, he added.

"Parana state has rejected all our proposals and it appears the exporters' only option may be to obtain a court injunction forcing the state to open the port to GMOs," said Sergio Mendes, president of the Brazilian Cereal Exporters Association, or Anec.

Uncertainty has been a contributing factor in widening soybean export discounts from Paranagua, which are currently quoted at 120 to 140 cents per bushel for March sailing, against a premium of 0 to 3 cents at the same point last year.

Paranagua and other Brazilian ports are expecting record movement this year with a record soybean crop due. And despite delays to soybean harvesting, Paranagua is already busy with a lineup filled with corn shipments, and waiting time to load is 19 to 21 days.

The waiting time should increase as soybeans begin to arrive from all parts of Brazil, most notably the southern regions where the incidence of GMO use is greatest.

"If the queue (of trucks) went back to Curitiba (some 100 kilometers from the port) last year, imagine what it will be like this year with these new rules," said one Sao Paulo-based trader.

Some traders had taken heart in the fact that state officials said in February that the port would only test a small proportion of the trucks that arrive at the port. However, the the current comprehensive testing would appear to contradict this information.

Nobody knows what they are going to do, said the trader. "We have even heard that they will test ships before leaving port, which would make sending soy through Paranagua insanely risky," he said.

However, almost 600,000 tons of soybeans have already been named in the line-up to leave the port