[MTC] France to Approve Modified Corn, Opening Way for U.S. (Update2)
Bloomberg News
July 30, 1998, 2:57 p.m. ET
France to Approve Modified Corn, Opening Way for U.S. (Update2)
(Adds details and comment from Monsanto spokesman starting
in 7th paragraph; adds analyst comment in 10th paragraph.)
Brussels, July 30 (Bloomberg) -- The French government
said it will soon approve for use two varieties of genetically
modified corn, opening the way for the U.S. to restart corn
exports to Europe worth about $220 million a year.
The government said it will grant licenses ''in the
coming days'' to two new gene altered corn varieties -- TER25,
developed by Hoechst Schering Agrevo Ltd. and Monsanto Co.'s
MON810. This is the final stage in the EU's biotechnology
approvals process and will allow the U.S. to export the corn
to Europe.
The U.S. is unable to sell any corn to Europe at the
moment because it can't guarantee that shipments don't contain
traces of the modified corn. European consumer and
environmental groups oppose genetically modified plants,
saying they could damage health and the environment. U.S.
officials said the restrictions have already cost farmers more
than $100 million in lost export earnings.
''Bearing in mind the positive opinions of the competent
French and European experts, two new types of corn, TER25 and
MON810, produced by Agrevo and Monsanto, will be authorized in
the coming days,'' the office of French Prime Minister Lionel
Jospin said in a statement.
Anticipated in U.S.
The French government said all future applications to
sell modified corn will be studied ''on a case-by-case basis,
with regard to their health and environmental effects.''
It also announced a two year moratorium on authorizations
of colza, also called rapeseed in Europe, because of
''uncertainties linked to the spread of transgenes into the
environment.''
U.S. producers, anticipating the opening of European markets
for U.S. corn exports, already are utilizing Monsanto's seed
technology, analysts said. Additional sales of genetically
altered seed based on the pending approval are not expected, said
Randy Krotz, director of industry affairs at Monsanto.
''The adoption of the technology by the U.S. growers was not
hindered because of the expectation all along was that the
foreign approval would come in time for the 1998 harvest,'' Krotz
said. ''It's a great thing for the export of corn, but as far as
additional sales for Monsanto, on the MON810 it probably won't
move the dial.''
Waiting for Months
Still, with corn prices down 17 percent this year amid
expectations for the second-largest U.S. crop on record and weak
Asian demand, the European market could provide a much-needed
export outlet for U.S. corn to be harvested this autumn.
Moves to open European markets to U.S. corn exports ''are
all positive developments and all incremental developments,'' for
Monsanto, said ING Baring Furman Selz LLC analyst Mark Wiltamuth,
who has a ''buy'' rating for Monsanto shares.
The EU originally approved the two corn types in April.
U.S. exporters have been unable to ship them to Europe because
France refused to give the approvals a final rubber stamp.
Under EU rules, the country which originally applied for the
license on behalf of the companies -- in this case France --
has to give the final approval.
''We've been waiting for this for months,'' said Dr.
Ernst Rasche, Hoechst Schering Agrevo's director of industrial
affairs. ''We are cautious. We'll only believe it once it's
really in our hands.''
Slower in Europe
U.S. diplomats in Brussels, who asked not to be named,
said they were satisfied with the decision.
No U.S. corn was offered at today's weekly grains
management committee meeting in Brussels for import into
Spain, because U.S. exporters knew they had no chance of
selling, the diplomats said. Spain will instead import 100,000
tons from other suppliers next week.
Special corn import quotas of 2 million tons for Spain
and 500,000 tons for Portugal are normally filled by the U.S.
This year, Argentina and central European countries such as
Hungary have filled most of the needs.
The U.S. has approved more than 30 genetically modified
seeds since 1990, while approvals in Europe are progressing
much more slowly.
About 40 percent of the 28 million hectares of soy
planted in the U.S. for this year's harvest were modified
varieties, as well as 20 percent of the corn crop and more
than half the cotton crop.
--Michael Mann in the Brussels bureau (32-2) 285 4300 with |
