Syngenta exploits fears over Monsanto GM corn seed

Syngenta flagged a boost to its herbicide sales from insect resistance to Monsanto's genetically-modified corn seed as it unveiled rising quarterly sales, led by an "excellent performance" in Latin America.

The world's biggest agrichemicals company, which is a huge player in seed too, said that North American sales of its Force insecticide brand tripled in the July-to-September quarter, defying a 2.1% decline in overall revenues in the region from farm sprays.

The jump in Force sales reflected "increasing growing awareness of resistance to a competitor's corn rootworm trait" - that is the protection against the damaging moth caterpillar fostered by genetically modified seed.

Rootworm threat

Syngenta's comments follow worries raised by some Midwest research suggesting that rootworms, which threaten some 45% of US corn area, and losses of $2bn a year, are cracking of defences in Monsanto GM seed.

The US Environmental Protection agency in August flagged "mounting evidence raising concerns that insect resistance is developing in parts of the Corn Belt".

Monsanto has said that further research is needed to prove resistance, and that it is working with the EPA on the matter.

The seeds industry is notoriously competitive, and often the stage for courtroom battle, allegations and counterclaims.

Monsanto earlier this month, unveiling its own results, said that its DekaLB corn was "outperforming competitive products" by some 8 bushels an acre in yield, adding that the group's biotechnology had provided "greater consistency in performance amidst this season's drought conditions".

Latin America boost 

Syngenta unveiled sales of $2.70bn for the quarter, a rise of 1.3%, or 6% excluding exchange rate effects.

The company said it enjoyed "an excellent performance in Latin America", where sales rose 10% to $2.16bn at constant currency, thanks to "strong start" to the sowings season for main-crop corn and soybeans.

"High soybean prices are leading to acreage expansion and increased investment by soybean growers in Brazil and Argentina," the group said.

Consultancy Safras e Mercado on Monday edged higher by 200,000 tonnes to record 82.5m tonnes its forecast for the Brazilian crop, citing an upgrade to its planting hopes.

Syngenta said it was "gaining share in corn and soybean seed" in Latin America, where it was benefiting too from "rapid technology adoption" in sugar cane, for which sales of agrichemical products doubled.

'Gathering momentum'

The results reflected "the breadth of our portfolio and the gathering momentum of our strategy", Mike Mack, the Syngenta chief executive, said, flagging "increased confidence in our long-term growth potential".

Syngenta earlier this month lifted its target for sales of products for its eight top crops, by 2020, to $25bn.

The group, which has also undertaken a string of takeovers, including of Belgian seed firm Devgen and nematode control group Pasteuria Bioscience, would "continue to invest in growth opportunities", Mr Mack added.

The data received a mixed response from analysts, with Kepler Capital Markets restating a "buy" rating on Syngenta shares, while Credit Suisse said that the figures fell short of its forecasts.

"We highlight North American [sales] growth of -4% was weaker than expectations, driven by the US drought," Credit Suisse said, forecasting a "muted" market reaction to the data.

Syngenta shares closed up 0.6% at SFr345.60.

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