UPDATE 3-Syngenta set to benefit from rising crop prices

* Q3 sales rise 10 pct to $2.2 bln, beat poll

* Rising crop prices to support volume growth-CEO

* GMO issue not gaining momentum in EU-CEO

* Syngenta shares rise 3 pct

(Adds background, updates shares)

By Silke Koltrowitz

ZURICH, Oct 14 (BestGrowthStock) – Food prices boosted by the
Russian drought fuelled forecasts of a strong 2011 for the
world’s largest agrochemicals company Syngenta AG (SYNN.VX: ) as
it reported forecast-beating third quarter 2010 sales on

Seeds and crop protection companies came under pressure
during the first half of the year as fierce competition from
cheap Asian herbicides and uncertainty regarding regulation of
genetically modified crops took their toll.

But rising commodity prices and demand for more bug and weed
killers enabled Syngenta to strike a more confident tone,
boosting the group’s shares by 3 percent by 1120 GMT on

“We have seen a number of developments from the Russian
drought to the ongoing recovery in some markets, so the demand
on these grain piles is growing,” Chief Executive Mike Mack told
Reuters in an interview.

“That combined with attractive conditions for growers in
places like Latin America (…) gives farmers a great
opportunity to invest in technologies,” he said, underlining the
grounds for optimism about the business.

For a graph on growth drivers, click on:

Prices for many agricultural commodities have risen sharply,
with corn (Cc1: ) climbing to its highest in more than two years
this week, boosted by a smaller-than-expected crop in the United
States, while wheat hit a two-year peak in early August as
Russia halted exports following a severe drought.

The surge in grain prices also underscores the rationale
behind BHP (BHP.AX: )’s (BHP.AX: ) $39 billion gambit for Canada’s
Potash Corp(POT.TO: ), the world’s top fertilizer maker.


Syngenta, which competes with Germany’s Bayer (BAYGn.DE: ) and
BASF (BASFn.DE: ), also makes genetically modified seeds, a
hot-button issue currently under scrutiny in the European Union.

However, Mack was not anticipating any big policy shifts in
Europe any time soon.

“GMO in the EU is at the moment not gathering any momentum.
Virtually nothing has changed,” the CEO said.

EU environment ministers will discuss the possibility of
member states restricting or prohibiting the cultivation of
genetically modified organisms in their territory at a meeting
in Luxemburg on Thursday.

Syngenta’s rise in sales to $2.2 billion between July and
September was driven by an upturn in markets in the Northern
hemisphere and strong demand in Latin America.

“Especially crop protection exceeded expectations,” Helvea
analyst Martin Flueckiger said, adding that Syngenta also seemed
to slowly regain pricing power in the business unit.

Syngenta is trading at its highest since the end of June, at
15.8 times estimated 2011 earnings, at a slight discount to
Monsanto but at a premium to European chemicals companies.
(Additional reporting by Andrew Thompson, Nigel Hunt and Martin
De Sa’Pinto; Editing by Hans Peters)

UPDATE 3-Syngenta set to benefit from rising crop prices