Chinese regulators have given a qualified green light to Japanese trading house Marubeni Corp’s USD5.6 billion purchase of U.S. grain merchant Gavilon, imposing stiff conditions that underscore Beijing’s anxiety over food security. The deal was announced almost a year ago but has been held up for months by Beijing’s close scrutiny of the combined group, which would have a leading role in supplying soybeans and other grains to China. U.S. and European antitrust authorities had already cleared the transaction. The Anti-Monopoly Bureau within the Ministry of Commerce (MOFCOM) said that the merger may “eliminate or limit competition in China’s soybean importing market.” Gavilon and Marubeni would be required to maintain separate, independent trading units when selling soybeans to China, with strict firewalls to prevent any exchange of market information. China, the world’s top soy importer, wants competition for soybean sales to ensure it is able to secure all the oilseeds it needs. The conditions imposed by China were surprising because it is unlikely that Marubeni and Gavilon would be able to control supplies or fix prices in such a large market, said Danny Murphy, President of the American Soybean Association. Marubeni’s USD5.6 billion acquisition of Gavilon, an amount that includes the assumption of around USD2 billion of debt, propels Japan’s fifth-largest trading house into the top ranks of global merchants. Marubeni gains access to Gavilon’s vast grain storage network as well as a significant domestic fertilizer and oil trading operation. Marubeni is already the second-largest exporter of U.S. grain to China, handling about a fifth of such exports in 2010. China’s soybean imports could approach 80 million tons within the next five to seven years, up from the record 61 million tons expected for the crop year that ends on August 31, Murphy said. China’s expected imports this year represent nearly a quarter of global soybean production. Marubeni last year was the largest soya supplier to China, exporting 10.5 million tons of the 58.4 million tons the country bought overseas, ahead of rivals Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus Commodities.