Syngenta unveiled a drive to exploit the huge sowings
forecast in Latin America, spurred by soaring crop prices, as the seed and
sprays giant unveiled earnings ahead of expectations for the first half of the
Mike Mack, the Syngenta chief executive, said that after a "strong"
performance in the northern hemisphere in the January-to-June period, "the
focus is now Latin America, where the outlook is positive, given record soybean
A range of analysts have made large forecasts for South
American soybean crops to be planted later in 2012 and harvested in 2013.
Macquarie on Tuesday forecast a rise of 2m hectares to 27.0m
hectares in Brazilian soybean sowings, and a jump of 16.0m tonnes to a record 81.0m
tonnes in output, while last week Safras e Mercado pegged the crop at 82.3m
tonnes, on an area of 27.2m hectares.
Agroconsult has pegged Brazil's soybean harvest at 83.1m
Syngenta is "looking forward to a big second half down there
in Latam", Mr Mack said.
The comments came as the group unveiled first-half earnings up
5.1% at $1.50bn, on revenues up 7.3% at $8.27bn, a performance which reflected
the range of dynamics in grain and oilseed markets.
A jump of 24% to $2.78bn in sales in North America "reflected
early sowings and widespread optimism for the season" early on, when farmers
looked set for huge yields besides prices which, while well below current
levels, were high by historic standards.
In Europe and the former Soviet Union, the group exploited "increased
planting of spring crops following winterkill on more than 7m hectares of
cereals", besides the structural shift in Ukraine to planting corn.
"Former Soviet Union [operations] in particular continued to
perform strongly, with the ongoing intensification of agriculture and a share
increase in corn herbicide usage in Ukraine," Syngenta said.
In South America, the group tapped hefty sowings of winter
corn, planted as a follow-on crop to soybeans, and which is set for record output,
boosted by the late start to the dry season – a delay which has set back sugar
cane and coffee harvests.
And the group took a sanguine view of the impact of the US
drought, whose threat to crops has only kicked in over the last six weeks, saying
that, for growers, price increases were "taking the sting" out of yield losses.
The group also flagged the performance of its AgrisureArtesian
brand of corn seed in withstanding the moisture shortage, which it said had
left farmers' wells with 25% of the reserves they had a decade ago, and with
costs higher of pumping the water to fields.
"The need for technology in agriculture was never greater
than it is today," Mr Mack said.
The data was well received by investors, who had forecast
Syngenta reporting a net profit of $1.41bn, on sales of $8.22bn
Syngenta shares closed 3.6% higher at SFr332.00.