by | Jul 15, 2011 | Markets, Trade Data

Sinochem and Monsanto talk about joint venturing

Sinochem, China’s state-owned chemicals conglomerate and top exporter, and Monsanto, the US-based provider of agrochemicals and biotechnology aimed at increasing farm productivity, are reported (by the Wall Street Journal) to be talking about expanding their relationship.

We’ve covered both companies before: Monsanto because its Roundup Ready sugar beets were temporarily banned in the US in a skirmish between proponents of genetically engineered crops and opponents of Frankenfoods (see “A Time to Plant, a Time to Sue”); Sinochem because it was a potential alternate suitor for Potash Corp. of Saskatchewan when the world’s largest fertilizer company was trying to fend off BHP Billiton’s take-over bid (“Tug of War over PotashCorp”).

The same themes are at work in the story that currently brings these two global players together: Monsanto is advancing its GMO [for genetically modified organism] solutions globally and China is intent on securing the resources it needs to improve domestic crop yields and so assure its food supply. (As the WSJ notes, food crops are a “rare category” of trade commodities in which the US is a net exporter to China.)

The data on the companies’ current import-export trade activities shows, among other things, that the Sinochem group of companies sent almost 750 shipments to the US last year. These were primarily cargoes of chemicals, including pharmaceuticals and nutraceuticals … although Sinochem Ningbo Chemicals Co., Ltd., surprised us by shipping rattan bistro sets, loungers, granite fire pits, and trekking poles, as well as refrigerants, an indication of that subsidiary’s diversification into outdoor products. The Sinochem Shanghai Company’s exports were more typical (or, rather, more what we expected) and included chlorotoluene, octanol, acrolein, diglyme, vanillin, and DTPA.

Monsanto’s imports also caught our attention: nearly 6,000 metric tons of seeds, mostly corn, for planting, and most of that from Chile – a reminder that Chile is the top producer of GMO seeds in the Southern Hemisphere. It is also the battleground for yet another dispute centered on GMOs. Earlier this year, the Chilean Congress ratified the international UPOV 91 Convention granting patent rights to developers of new plant varieties. Opponents, concerned about farmers rights and biodiversity, challenged the convention in court, but saw their case dismissed last month. Other challenges are in play in the Americas, including a petition for public disclosure of the locations in which the GMO seed crops are being raised.

In contrast, China seems ready to welcome GMO technology. Certainly Sinochem, which acquired the China Seeds Group in 2007 and picked up Monsanto’s pesticide operations in Asia in 2008, seems poised to introduce Monsanto’s products to the Chinese market.

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