Monsanto appointed China’s Sinochem as the sole distributor of glyphosate herbicide for Australia and New Zealand. The move came one day after Monsanto terminated its decade-long contract with Nufarm Ltd.
Monsanto has been building ties with Sinochem, which is a state-owned crop protection company. The latest contract will allow Sinochem to have its largest push into the Australian market since it abandoned a 2.62 billion Australian dollar (US$2.70 billion) takeover bid for Nufarm in 2009.
Australia has become attractive to global agriculture companies looking to invest in agriculture. Australia is located near burgeoning Asian economies where the appetite for more Western-style foods is increasing along with the middle class.
The new contract will allow Sinochem to have greater access to the Australian market than it has ever had. The company will have the opportunity as a result to introduce its own products to the region.
With the end of its contract, Nufarm will stop selling glyphoste into the Australian and New Zealand markets by Aug. 28. Nufarm has been selling glyphosate into this market since 2002. With the announcement of the new deal, Nufarm said it will develop its own glyphosate based herbicide.
Doug Rathbone, managing editor, Nufarm, said the glyphosate market had become eroded and offered less value for suppliers in the Australian market.
“We will now focus our ongoing investment in glyphoste on Nufarm’s own brands where we can build long-term value on a more secure basis and ensure our cost competitiveness."
Nufarm's glyphosate sales under the Roundup brand in Australia and New Zealand were worth about $100 million in fiscal 2012.
Nufarm makes about 50 percent of the glyphosate sales in Australia.