London (Platts)--6Feb2013/718 am EST/1218 GMT
Swiss group Syngenta, the world's largest producer of farm chemicals, said Wednesday that net income in 2012 rose 17% to $1.87 billion as adverse weather boosted demand for its pesticides, fertilizers and seeds. The result beat analysts' estimates of around $1.8 billion. "In 2012, crop prices rose sharply as adverse weather conditions in several regions resulted in significant production shortfalls, once again highlighting the fragility of global supply. Growers in the affected regions had to adapt quickly in terms of planting and investment decisions, while also dealing with ongoing challenges such as weed and insect resistance," CEO Mike Mack said in a statement. US corn prices rose 25% from mid-June to August to new record highs because of concerns that crops would be decimated by the worst drought in the Midwest since the 1950s. During the extremely hot and dry summer of 2012, the US Department of Agriculture estimated that nearly 90% of the US corn crop was within a drought area. The current US corn crop is expected to be the smallest in six years at nearly 10.8 billion bushels, according to the USDA's January 2013 crop forecast, and 13% smaller than the previous one. Extreme weather conditions sent Syngenta sales volumes higher by 7% in 2012 and prices by 3%, amounting to full-year revenues of $14.2 billion, or 10% higher than in the previous year at constant exchange rates. "The strong growth in Syngenta's sales reflected our flexibility in providing solutions across crops ... These are proving their worth in developed and emerging regions alike, contributing to growth rates of eight percent and 11 percent respectively," Mack said. CORN PRODUCTION IN BRAZIL Syngenta will invest $77 million to quadruple corn seed production in Formosa, in Brazil's center-west region, to 1.6 million bags by 2015, the company said in a separate statement Wednesday. Corn production in Brazil, the world's third largest grower of the staple grain after the US and China, is expected to nearly double by 2020, spurred by growth in the pork and poultry sectors, Syngenta said. According the USDA, Brazil is forecast to produce 71 million mt of corn in the 2012-13 season, down 2 million mt from the previous one. The value of the corn seed market is also expected to reach $2.7 billion by 2020, with a bigger second harvest and wider technology adaption, the Swiss group added.--Guilherme Kfouri, guilherme_kfouri@platts.com--Edited by Jonathan Fox, jonathan_fox@platts.comSimilar stories appear in Biofuelscan. See more information at http://www.platts.com/Products/biofuelscan