Trading firms' dispute with Monsanto threatens soy sales in Brazil
SAO PAULO, July 17 (Reuters) - An impasse between U.S.-based Monsanto Co and soybean buyers in Brazil over royalty payments on a new seed technology may complicate the country's sales of the upcoming oilseed crop.
Monsanto has fought farmers over royalty payments for its seed technology in courts around the world. In Brazil, it now wants commodity trading firms to ensure farmers pay the proper fees for its new South American seed, Intacta RR 2 Pro.
But trading firms are afraid to get caught in the crossfire.
Brazil's Vegetable Oils Association (Abiove), which represents international soybean traders such as ADM, Bunge, Cargill and Louis Dreyfus, said members have been negotiating with Monsanto for six months.
"We can serve as monitors in this process, as Monsanto requests ... but we cannot assume legal responsibility for the collection of royalties," said Abiove President Carlo Lovatelli.
Monsanto said in a statement on Thursday that it was confident the best solution would be found in favor of Brazilian soybean growers.
The main concern for the soy industry in Brazil, which exports more than half of its annual harvest, is what would happen if questions arise over a royalty payment on a soy cargo that has already been shipped, Lovatelli said in an interview.
"It would be like selling a complete car and then having the tire manufacturer come and complain about something to do with the rubber," he said.
If the impasse continues, buyers may not be able to purchase soy from Brazilian farmers who planted their fields with Intacta. Brazil, the world's No. 1 soy exporter, is Monsanto's second-largest market after the United States. Continuación...