Seed Today

FRANKFURT, Feb 5 (Reuters) - BASF, the world's largest chemicals group, won approval for the cultivation of a genetically modified (GM) soy variety in Brazil, its debut in the GM-seed market.

A top executive told Reuters on Friday that the German company, which has annual sales of about 3.6 billion euros ($5 billion) from crop products, aims to win 10 to 20 percent of the soy acreage in Brazil, the second-largest soy producer after the United States.

"This is the first time that BASF won regulatory approval for cultivation from a country for a genetically modified product," the head of BASF's crop chemicals unit Stefan Marcinowski said.

BASF, a smaller player in the global pesticides and seeds market, is branching out into a market that is dominated by the No.1 GM-seed maker Monsanto.

Brazil, which is expecting a record 65 million tonnes annual soy harvest this year, gets about 60 percent of its soy from genetically modified seeds sold mainly by Monsanto and DuPont's Pioneer.

BASF is investing in research at its agricultural business because it offers a more stable income stream than its cyclical plastics and industrial chemicals units.

Marcinowski reaffirmed a previous outlook for the Agricultural Solutions unit to post core earnings above 25 percent of sales in 2009, far above the group's average margin.

He declined provide a peak sales estimate for the new soy product but said that proceeds will be evenly shared with BASF's development partner Embrapa, Brazil's state-owned crop research institute.

BASF also stands to benefit from increased demand for weed killers based on the compound imidazolinone, which the new soy breed is tolerant to, but BASF has to contend with rivals offering generic imidazolinone.

Embrapa and BASF are now seeking the approval for the GM-soy in key export markets such as China and the U.S., where it would mainly be used for animal feed.

The next step to grow BASF's fledgling plant biotech business will be the introduction of drought-tolerant corn in the U.S. in 2012, where it collaborates with Monsanto.

BASF has been trying in vain for years to win European Commission approval for a GM-potato, which yields high amounts of starch used by the paper and textile industry.

more SEED NEWS...