Monsanto Having Major Difficulties

Norfolk Genetic Information Network (ngin),

Monsanto warned yesterday that profits this year would be lower than
forecast, triggering a further signficant fall in its shares.

Monsanto says it expects to make NO progress in Brazil, a major soya
market. According to the article, "Brazil has resisted strong pressure
from the US to accept GM seed".

Sales in Argentina have dropped more sharply than expected now Monsanto
has dispensed with extended credit for farmers.

It is also under pressure from the expiration of its Roundup patent

Other problems:

Monsanto's had to pull back from its plan to bring the first GM wheat to
market by 2005. Wheat millers in Japan and Europe have said they do not
want the GM product.

Monsanto also appears to have problems selling its existing GM seeds in
the US, reportedly offering 2003 corn seed to Iowa farmers at fire-sale

Monsanto was weakened further when the US drugs maker Pharmacia split
from Monsanto just two years after buying it. Monsanto denies it is in
danger of running out of cash.

Monsanto hasn't been helped by its own patent application admission that
transgenic pest control (as in Bt corn and cotton) "may not be desirable
in the long term" because it produces resistant strains and "numerous
problems remain...under actual field conditions".

And the rapid spread of weeds resistant to Monsanto's Roundup herbicide
is only adding to the company's woes.
Dry weather waters down Monsanto profits
David Teather in New York
The Guardian (UK) Saturday October 12, 2002

Monsanto, the agrochemical business that has become synonymous with
genetically modified foods, yesterday warned that profits this year
would be lower than forecast.

The controversial company blamed a fall in sales of its core herbicide
product Roundup in the US and lower than expected sales in Argentina.

Unusually dry weather in the agricultural belt of the Midwest in the US
and drought conditions in the plains blunted the growth of weeds and
reduced the need for its herbicide, the company said.

Roundup accounts for 45% of Monsanto revenues and is already under
pressure from the expiration of its patent. But the company, which will
ship up to 6m fewer gallons of the herbicide this year, said there had
been no loss of market share.

Yesterday's warning followed an earlier one in June when Monsanto
reduced its outlook for 2002 and 2003 because of the turbulence in Latin
American markets. At the time it said it would restructure its business
practices in Argentina to operate under cash-only terms with customers
instead of extending credit.

The effect has been to reduce sales more sharply than the company had

Shares in the St Louis-based business fell by more than 11% in early
trading on Wall Street but later recovered some of those losses to
change hands 38 cents lower at $15.21.

John Roberts, a research analyst at Buckingham, the US brokerage, said
investors' nerves had been eased by the fact that the warning appeared
to have been caused by one-off external events rather than any
fundamental issues.

"There is nothing about their competitive position that has
changed here," he said. "Investors are somewhat more forgiving on issues
of weather and Latin America since they don't have high predictability
and are really outside factors."

Monsanto conceded in August that widespread opposition to its
genetically modified agricultural products meant it would be at least
another three years before they won approval for sale in Europe.

There has been a moratorium imposed on the approval of new GM crops
since 1998 because of public anxiety about the potential risks to health
and the environment.

The company also said it expected to make no progress in Brazil, a key
producer of soya beans, in the same time frame. Brazil has resisted
strong pressure from the US to accept GM seed.

"We are assuming no progress in Europe until 2005. We are trying to be
conservative," Hendrik Verfaillie, the Belgian chief executive of
Monsanto said at the time.

Monsanto has made inroads into India, the world's largest cotton
producer, and is trying to break into the Pakistan market to sell GM
seeds. The company is arguing that its bioinsecticide cotton needs less
water than the staple food crop of rice.

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