January 16, 2007

EU mission to inspect Brazil's GM soy farms in March

European food inspectors are expected to visit Brazilian genetically-modified (GM) soybean farms and related sites for the first time in March, the local Estado newswire reported Monday.

The move comes at a time when Brazilian soy farmers are quickly moving away from traditional soy seeds and planting GM soy. Some 50 percent of the new 2006/07 crop is expected to be GM soy, according to a survey of farmers and cooperatives by the grain brokerage firm Cerealpar. Last year, just 25 percent was GM. Brazil's government permits Monsanto's Roundup Ready soy seeds to be planted nationwide.

Brazil was once one of the only places to find non-GM soybeans, but farmers turned to Roundup Ready this year, which helps them reduce spending on herbicides for weed control.

The EU has the most strict market requirements for GMO foods. It is likely that the mission will seek to judge whether Brazilian trade companies are separating storage of GM and traditional soybeans in warehouses and silos at export terminals and not mixing the two.

"There is going to be a niche market for GM soybeans, but that market is shrinking. The EU will be the niche, but a new line of trade must be sought," Steve Cachia, a market analyst at Cerealpar, told Dow Jones Newswires.

"That new line is going to have to include higher prices for non-GM soybeans because of separation costs," Cachia said.

The EU does import GM soybeans from Brazil.

Of the total US$49 billion in Brazil's agriculture exports in 2006, 31 percent of that value came from EU markets, according to the Monday newswire report.

Brazil is the world's no. 2 soy producer and exporter behind the US.