Bayer Plans to Take on Monsanto in Brazil With GMO Soybean Seeds

  • Marks Bayer's return to Brazil after exiting a decade ago
  • BASF is also introducing new soy technology for next season

Bayer AG and BASF SE are planning to introduce new genetically modified soybean seeds this year in Brazil as the companies seek to break Monsanto Co.’s decade-long dominance in the South American country, the world’s second-largest producer of the crop.

Bayer’s agriculture unit, Bayer CropScience, will begin selling soybean varieties in Brazil that are resistant to the herbicide glufosinate ammonium for the planting season starting in October. The seeds will be an alternative to Monsanto’s glyphosate-resistant crops. The move will mark Bayer’s attempt to return to a market it left more than a decade ago after selling its soybean and corn seed assets in Brazil.

Brazil has embraced the cultivation of genetically modified organism, or GMOs. Crops modified to withstand the application of glyphosate weedkiller now account for 94 percent of Brazil’s soybean plantings, according to a report from consulting company Celeres. But glyphosate has become less effective after two decades of intensive use, and Monsanto’s competitors see an opportunity to seize a share of the modified-seed market.

"We strongly believe in the market dynamics for weed-controlling in Brazil," Eduardo Mazzieri, Bayer’s seed unit director in the country, said Tuesday in an interview in Nao-me-Toque, Rio Grande do Sul state, following a press conference held by Bayer. "Farmers need alternative tools."

Brazil Acquisitions

Bayer faces tough competition from Monsanto, whose Intacta RR2 PRO soybean seeds, introduced three years ago, are its fastest-growing biotechnology trait. Their use in South America will more than double in 2016 to 35 million acres (14 million hectares) and could reach 75 million acres by 2019, according to Sara Miller, a spokeswoman for the St. Louis-based company. Intacta is not only tolerant of herbicide but also resistant to insects and offers potentially higher yields.

Bayer’s Liberty Link trait, which has been commercialized since 2009 in the U.S., was approved by Brazilian authorities in 2010. Since then, the Leverkusen-based company has acquired five soybean-seed companies in the South American nation as part of its plan to increase its presence in the market. The transgenic seeds will be planted by as many as 2,000 farmers in Brazil this year, Mazzieri said. He declined to provide guidance on acreage or sales volumes.

Record Harvest

Like Bayer, Germany’s BASF SE is also coming to market with new herbicide-resistant soybean varieties in the next planting season. BASF’s seeds were developed in a venture with Brazil’s state-run research company Embrapa. The commercial potential for the company’s Cultivance trait is "directly related to rising problems with weed control," as it expects to get as much as a 10 percent stake in the soybean-seed market over the next few years, BASF said in an e-mailed response to questions.

Soybeans account for about half of Brazil’s total grain and fiber output. This year’s harvest is seen by government crop agency Conab rising to a record of more than 100 million metric tons. Farmers have boosted plantings, spurred on by the depreciation of the real against the dollar, which makes Brazilian exports more competitive. Foreign shipments are seen rising by 7 percent to record 57 million tons in 2016 after an 18 percent surge last year, exporters group Anec said in January.

"We remain highly optimistic about the prospects for agriculture in Brazil, both in the short and long terms," Mazzieri said.