Aflatoxin, a carcinogenic mildew, was suspected by a product safety watchdog in cooking oil produced by three companies in southern Guangdong province, China's official Xinhua news agency reported Thursday.
A product safety official ordered the recall of the oil produced by Fusheng Oil, Manyi Peanut Oil and Mabao Oil, Xinhua said.
The three companies' storage facilities were closed, their licenses revoked and their plants ordered to suspended operations while authorities continued their investigation.
It was not immediately known how much of the three companies' tainted products had entered the market.
The report said aflatoxin, produced by a fungus on crops such as grains and peanuts, can cause cancer in some animals.
The same substance was found in high doses recently in dairy products from the popular Mengniu Dairy Group. An initial probe showed the contamination occurred in feed given to cows in the dairy's plant in Southwest Sichuan province.
The company earlier this week issued a public apology and assured the problem was discovered before the tainted milk reached markets.