The Brazilian drought, which has sent coffee and sugar
prices soaring, has cost seeds group Ceres more than one-quarter of its test
sites for sorghum varieties it is developing as bioenergy crops.
The US-based company said that the "severely hot and dry
conditions" in Brazil's Centre South region - the country's major cane-growing
area where Ceres is testing its crops - had affected "several" of its sorghum
"The impact of the variable weather," felt most in Ceres
plots in the west of Sao Paulo state, "has been ameliorated, in part, by the
geographic distribution of the evaluation sites and the natural tolerance of
sorghum to harsh conditions".
Sorghum, which has been called the "camel of crops", is
viewed as one of the more drought tolerant grains, making it popular in arid
regions of Africa, China and India, although that has not prevented heavy
losses in eastern Australia this year to the first-quarter dry spell.
US officials last month slashed their estimate for Australia's
sorghum harvest by 700,000 tonnes to 1.2m tonnes.
Nonetheless, Ceres said that of the 55 test sites planted,
only about 40 "are expected to provide yield and performance data".
"Due primarily to severe conditions in certain regions,
approximately 15 customer evaluation sites are not expected to provide
meaningful yield data or have been lost," the group said.
Ceres added that "at this time", it expected "to generate
reliable yield and performance data at enough locations to select products for
advanced field evaluations next season".
The group, which is using biotechnology to engineer sorghum
for use as a raw material for ethanol production or as a biomass crop for electricity
generation, said it would collect yield results by July.
Richard Hamilton, the group's chief executive, added that
the group was "confident that we can continue to drive yields higher for our
mill customers and address the industry's need for additional feedstock supply."
The comments came as Ceres, which last month raised $23m from
investors through a share issue, unveiled a 19.4% drop to $7.23m in losses for
the December-to-February quarter.
Although revenues halved to $495,000, reflecting a loss of
external research funding, costs were kept in check by reductions to research
expenses, and changes to its sales incentives programme in Brazil.
Costs were "generally in line with management's expectations",
said Paul Kuc, the Ceres finance director, adding that last month's
fund-raising had given the group "the resources we need to launch new seed
products, as well as pursue additional out-licensing opportunities for our
biotech traits and genetic technologies".
The group's loss was equivalent to $0.29 a share, a little
below the $0.30 a share that Wall Street expected.