South America Calling

Monsanto Says RR2 Available for Around 9% of Brazil Area in 2013-14

Following Sunday's news that China has approved the importation of Monsanto's Intacta RR2 Pro soybeans, Brazilian distributors are now engaged in an unholy rush to get the genetically engineered seeds to market in time for 2013-14 planting, which begins in three months' time.

"If we had more time, it would have been much better, but there is time to deliver in time for the next harvest," Rodrigo Santos, chief executive of Monsanto do Brasil, told journalists Tuesday.

Monsanto estimates that RR2 seeds could cover as much as 6.2 million acres across Brazil next season, which is equivalent to approximately 9% of planted area.

For the first time a major GE technology will be launched first in Brazil before the U.S., reflecting the growing importance of South America in the biotech market.

RR2 had been approved by Brazilian authorities, but Monsanto was awaiting import clearance by China, Brazil's main client, before rolling out the technology commercially.

Brazilian farmers are keen to adopt the technology, which has the principle trait of being resistant to caterpillars and promises gains in yields.

Monsanto claims tests conducted by 1,000 farmers across Brazil over the past two years resulted in yields some 10% higher than averages.

The value of royalties charged on the RR2 technology, which will be used by seven different seed companies, has not been released.

According to Marcio Santos, Monsanto's product strategy director, the financial terms of the RR2 rollout will be announced next week.

Earlier in the year, the St. Louis-based company announced it would charge a RR2 royalty of R$115 per hectare ($21 per acre), or 7.5%, on the subsequent production. But Santos said this could be revised for the new season.

Brazilian soybean farmers are traditionally fast adopters of technologies, but it will take five years for RR2 to reach its full market potential, which can reach a maximum of 80% of total area due to restrictions on local GE crops, said Santos.

The RR2 will be offered simultaneously across all of Brazil's main producing regions, he added.

In addition to resistance to glyphosate, RR2 offers controls of the five of the principle caterpillars attacking soybeans -- Anticarsia gemmatalis, Chrsodeixis includens, Roachiplusia nu and Crocidosema aporema and Heliothis, said Monsanto.

It also has the power to suppress the Helicoverpa caterpillar, which invaded soy fields in the northeast over the last year, the company claims.

Events have conspired to increase the buzz over the launch of RR2 in Brazil.

Insect populations have grown significantly across Brazil over the past year, forcing farmers to increase average insecticide applications from 3.6 in 2010-11 to 4.6 in 2012-13, according to Kleffmann, a farm consultancy.

Brazil's soybean farms have progressed significantly in the application of seed technology, soil management and disease control over the past decade. Pest control has become a major issue over the last couple of years.



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