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Focus: How a Philippines regulator stymied DowDuPont's global seed launch

Reuters  |  WINNIPEG, Manitoba/CHICAGO 

By and Tom Polansek

WINNIPEG, Manitoba/(Reuters) - A regulator poses an unexpected obstacle to DowDuPont's launch of a new line of genetically engineered soybeans in the as the company challenges Bayer AG's decades-long dominance of the U.S. seed market.

China's January approval for imports of DowDuPont's Enlist soybeans - amid the U.S.-trade war - had raised hopes that the seeds would be broadly available for the U.S. spring planting season. It took more than five years for the company to win China's approval.

But now says widespread sales of Enlist seeds in the United States, and may be delayed until the 2020 planting seasons unless the regulator moves quickly.

The issued new regulations for genetically modified products such as Enlist in 2016, and the process involves input from more government officials. Some applications now take years to process.

Although has historically been the No. 1 importer of U.S. soybeans, the Philippines last year was the top buyer of processed U.S. soymeal, used primarily to feed livestock.

A slow start would be a missed opportunity for because farmers are eager to reduce their reliance on Bayer, which acquired last year.

Enlist soybeans, marketed by DowDuPont's agriculture unit Corteva Agriscience, will eventually shake up the $40 billion U.S. soybean market - half of which is controlled by Bayer's brand. Enlist is the first soybean genetically modified to withstand sprays from three popular - 2,4-D, glyphosate and glufosinate.

soybeans are popular for their robust yields but have drawn complaints, lawsuits and regulatory scrutiny after the dicamba herbicide that farmers use with the crops drifted to neighboring fields and killed plants that were not genetically modified to resist it. The last year approved use of dicamba for two more years, adding restrictions on how it can be used.

"There's definitely a market for Enlist soybeans, and some producers have been waiting for market approval for some time now," said Monte Peterson, of Valley City,

But the uproar over dicamba drift could also potentially benefit Bayer's Xtend because Enlist does not tolerate dicamba.

"There's a significant number of growers who are planting Xtend from a defensive position," said Carl Peterson, of in

China's purchases of U.S. soybeans have plummeted since imposed tariffs on imports in response to an array of duties slapped on Chinese imports by U.S. But U.S. spring soybean plantings are nonetheless expected to remain only slightly below last season's levels in a sign that farmers hold out hope for a resolution of the U.S.-trade war.

China's January approval of Enlist soybean imports, along with those of four other genetically modified crops, was seen as a goodwill gesture by some U.S. agriculture industry advocates.


In the Philippines, the tougher rules imposed by regulators came after the nation's demanded an overhaul of genetically modified crop approvals, acting on a petition by environmental activists.

"There are more players, and you know how bureaucratic the process is," said Geronima Eusebio, of biotech for the government's Bureau of Plant Industry, adding that personnel still need training in the new regulations. "We are doing our best."

The timeline for a decision on Enlist soybeans is unclear, Eusebio said, although the bureau now has all required assessments from government ministries.

Bayer expects to expand Xtend's market share of U.S. soybean acres to more than 50 percent this year regardless of whether Enlist becomes broadly available, said Ryan Rubischko, Bayer's portfolio lead for dicamba.

Last year, the Philippines regulator didn't approve soybeans until summer, said Scott Beck, of Atlanta-based Beck's Hybrids.

"We're in a similar waiting pattern until Philippines provides that blessing, and we don't know when that will be," he said.


faces other entanglements, some resulting from the consolidation of agrochemical companies in recent years.

DowDuPont, the product of a merger last year, inherited a contract with Bayer that effectively limits how aggressively it can sell Enlist. DowDuPont will sell Bayer's Xtend through 2023 as part of a patent infringement settlement between their predecessor companies and in 2013.

The settlement should help Bayer "suppress the competition" by tying up Corteva staff and logistics that could otherwise focus on Enlist, said Bill Johnson, at

Corteva's global soybean portfolio manager, Mike Dillon, declined to say how much of Bayer's soybeans his company is required to sell.


Enlist's eventual arrival is already yielding opportunities for other companies.

Nufarm Ltd, the second-biggest 2,4-D supplier in the after DowDuPont, is opening a new plant in in April, and expanding a Chicago-area facility.

Nufarm is already running its plants at close to capacity and will need to scale up production quickly at its new plant to meet demand for Enlist, said Ken Barham, its He expects, however, that it will take a year or two for Enlist to gain traction.

The delayed launch has been costly for smaller seed companies.

Mustang Seeds in Madison, South Dakota, grew Enlist soybean seeds for the past three years in case China approved imports of the crop, president said.

When that didn't happen, the company kept a portion of the harvest to grow more seeds and took the rest to a crushing plant that would keep the products out of export markets, he said.

"It's a money-losing situation," Schultz said.

(Reporting by in Winnipeg, and in Chicago; additional reporting by in Manila and Michael Hirtzer in Chicago; Editing by and Brian Thevenot)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, February 12 2019. 11:35 IST