Brazilian officials, nudging higher forecasts for the
domestic soybean harvest, reopened the debate over Monsanto's Intacta soybean
variety, flagging "difficulties in marketing the seed" in some areas.
The Conab crop bureau said that in Rio Grande do Sul, Brazil's
third-ranked soybean producing state, it was "common" for farmers to use "modern
varieties" of seed, offering a blend of beneficial traits.
This "should influence productivity", the bureau said, estimating
a 1.3% rise to 2.64 tonnes per hectare in the state's yield this year, and a 6.3%
increase to 3.03 tonnes per hectare in the national average result.
However, the cutting edge Monsanto-developed Intacta genetically modified variety had been "facing
difficulties in marketing", Conab said, citing "the price of the royalties
charged by the companies that developed technology".
"In many cases, this is higher than the expenditure on insecticides
used to fulfil the same role" in controlling pests.
'Off to a great start'
The comments follow market talk last year that Intacta had
not been faring as well as Monsanto hoped, with OTR Global in September cutting
its rating on the seed giant's shares to "negative" from "mixed", citing reports
from seed dealers in Argentina and Brazil of weaker-than-expected sales of the
cutting edge biotech seed.
However, Conab's assessment contrasts starkly with Monsanto's
own reports on Intacta, with the group on Tuesday saying that South American sales
were poised to beat a target range of, in area terms, 10m-12m acres.
"We are off to a great start with Intacta," Brett Bergemann,
the Monsanto chief operating officer told investors.
"Our value proposition held as growers embraced the
technology across multiple growing regions in South America."
Hugh Grant, the Monsanto chief executive, said that "the
buzz in the market has really lifted interest across the whole range" of Intacta products, which were the first seeds that the group developed specifically for the South American market.
Conab also offered some reassurance on pests, which have
appeared a growing problem for Brazilian farmers, promoting moves against the
planting of second-crop soybeans, and keep a bigger intra-crop period, so
discouraging caterpillars and diseases.
In Mato Grosso do Sul, soybeans are enjoying a "below-normal"
incidence of pests and diseases, "surprising farmers", the bureau said, flagging
the role of weather in depressing infestations.
"The biggest problem has been weeds," such as horseweed, or
Conyza, against which "chemical control has not been effective".
Monsanto chief technology officer Robb Fraley on Tuesday
flagged the potential for continuous cropping to promote infestations.
"Clearly in the South America environment where you don't have
the cycle between crops and the winter cycle, the evolution of pests is a key
challenge," Mr Fraley told investors.
"That is why I always emphasise our focus on not only the
success of Intacta but the second-generation Intacta that has another mode of
"Similarly in corn, having multiple above and below ground
technologies will be key for durable insect control."
Conab's comments came as it nudged higher by 100,000 tonnes
to a record 95.9m tonnes its forecast for Brazil's soybean output this year,
saying rains last month had been favourable in most major growing areas, with
the exception of parts of Parana.
The estimate for corn output was lifted by 400,000 tonnes to
79.1m tonnes, although this assumes 9.19m hectares of the grain sown as a
follow-on, safrinha crop, for which the sowing window remains open until late
Many observers believe lower corn prices will depress safrinha
sowings to levels well below those of last year.