The boost to European agrichemicals demand from a mild
winter, and for Brazil's needs thanks to a caterpillar outbreak, helped
Syngenta raise sales despite hits from the cold US weather and tumble in
Russian and Ukrainian currencies.
Syngenta, the world's biggest farm sprays company, said that
its sales in North America tumbled fell 8.1% to $1.23bn in the January-to-March
quarter, hurt by region's harsh winter, which has set back spring fieldwork and
"Prolonged cold temperatures delayed the start to the US
season across the Corn Belt," the group said, adding that "drought in
California reduced demand for insecticides and fungicides" in a state important
for higher-value crops such as fruit, nuts and vegetables.
While sales of agrichemicals in North America suffered
particularly, falling 11.0%, seed takings dropped 2.0%, "with US growers
delaying planting decisions" as cold temperatures hampered fieldwork.
US growers, who had planted only 3% of their corn as of Sunday,
half the typical sowing pace, are expected to ramp up soybeans at the expense
of corn, although varying spreads between futures prices of the two crops is
viewed as influencing decision making.
'High disease pressure'
Syngenta also acknowledged some setback from the Ukraine
crisis, which has sent the hryvnia and Russia's rouble to record lows against the
dollar, although it maintained some growth in former Soviet Union.
Increases to product prices "partly" offset the dent to
sales, in dollar terms, of weaker local currencies.
However, European sales rose 12.6% to $1.43bn nonetheless,
boosted by demand for agrichemicals after a mild winter which, as UK field-watchers have noted, has encouraged elevated pest levels.
Syngenta noted "high weed, disease and insect pressure",
besides "an early start" to growers' spring planting and fieldwork season.
In Latin America too, "high caterpillar pressure contributed
to a significant increase in insecticide sales", helping overall takings for
the region rise by 4.8% to $595m.
Brazil in particular suffered an outbreak of the Helicoverpa
corn earworm moth, whose caterpillar devours not just corn but the likes of
soybeans and cotton too, although a widespread spraying programme is seen as
having largely limited damage.
Syngenta also noted in Latin America double-digit growth in
fungicide sales, a reflection of rising cotton plantings, while highlighting a
dent to its seed sales from weaker plantings of second-crop, or safrinha, corn
in Brazil, a reflection of weaker prices of the grain.
Group sales for the quarter rose 2.5% to $4.68bn, matching
"We have made a solid start to the year despite adverse
weather conditions in North America," Mike Mack, the group's chief executive,
said, standing by a forecast for full year sales growth of 6% at constant
He did acknowledge some impact from the Ukraine crisis, in
terms of reduced hopes for earnings before interest, taxation, depreciation and
amortisation (ebitda) thanks to currency moves.
"Given the depreciation of a number of emerging market
currencies in the first quarter, the impact of currencies on full year ebitda is
likely to be around $100m compared with an earlier forecast of $50m," he said.
Nonetheless, Syngenta share stood 1.3% higher at SFr340.80
in morning deals.