PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 13:42 UK, 11th Apr 2014, by Agrimoney.com
Ceres loses seed test plots to Brazil's drought

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 sites.

"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.

'Lost sites'

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."

Loss narrows

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.

LINKS
Agricultural Commodities
Agricultural Markets
Agricultural Companies
Agricultural Events