Chicago Board of Trade rough rice futures took a nose dive Wednesday, falling nearly the 50-cent trading limit on talk of the trade disruption, traders said.

US export sales were already lagging about 20 percent from a year ago as business has been hurt since a biotech gene material LLRICE601 was found in the US rice supply last summer. The US government has said the variety, which was engineered to resist herbicides, is safe for human consumption, but many countries now require certification that US rice contains only trace amounts of GMO.

Three exporters of US milled rice had their shipments stopped, said Bob Cummings, the vice president of international policy at USA Rice Federation, a trade group. At least eight rail cars have been stopped at Laredo, Texas, he said.

Mexico is requiring certification from an approved laboratory that the grain is free of LLRICE601.

"We are working to make sure that Mexico understands this is a safe product," Cummings said. "We have been able to do that in countries like Canada where we are selling rice. We'd like to be able to do the same thing in Mexico."

Marco Antonio Meraz, who heads a federal biosecurity and GMO commission, said the Mexican government was testing for the LLRRICE601 strain which contaminated the US commercial supply last year. The Mexican Ministry of Health would publish the test results Friday or Monday, he said.

Mexico is the largest buyer of US rice and last year bought 805,500 tonnes of rice valued at US$205 million, USA Rice Federation said.

"Mexico would have to be considered the stumbling block for American rice today," said Neauman Coleman, an analyst and rice broker from Brinkley, Arkansas.

"Considering the magnitude of Mexico for American rice, any time you back up the flow, that just holds up overall consumption and tends to become a tad negative," Coleman added.

(Additional reporting by Christine Stebbins in Chicago)