Brazilian authorities approved a Chinese company's genetically modified soybean seed to be grown in Brazil. Chinese company DBN (Da Bei Nong) described this as a strategy to supply seeds for growing South American soybeans exported to China, thus capturing more value from the supply chain. DBN dreams of making money from seeds, but most of its income comes from selling animal feed and pigs in China.
According to DBN, its genetically modified soybean variety that combines herbicide-tolerant and pest-resistant traits passed a safety evaluation by Brazil's National Biosafety Technical Committee. The two events DBN9004 and DBN8002 were approved for planting in Brazil in 2023 and 2024, respectively.
DBN said the company now has to gain approval of the variety in "importing countries"--that would include China--before the seeds can be planted commercially in Brazil. China requires that a new round of testing and evaluations be conducted before GMO varieties can be approved for import to China.
DBN explains that the approval of seed for Brazil is part of a "seed export, soybean import" strategy of supplying seeds to grow soybeans in South America for sale to China. DBN notes that the company established subsidiaries in Argentina and Brazil in 2018. The traits just approved by Brazil had been licensed by Argentina in 2023 and by Uruguay in 2025. DBN describes the latest approval as a part of China's "diversification" of imports which has made Brazil the largest supplier of China's soybean imports.
DBN explains that its seed strategy has been "upgraded" to "export technology, import soybeans" as Chinese companies bring advanced planting techniques, management experience, storage and processing technologies to production regions in South America. The article doesn't mention that herbicide tolerant soybeans developed by multinational companies have been grown in Argentina since the 1990s and for more than 20 years in Brazil. China's soybean yields are inferior to those in South America so it is unclear what technical and management expertise a Chinese company has to offer.
A summary of China's plan for achieving status as an "agricultural power" released last month includes discussion of promoting the Chinese seed industry and protecting Chinese germplasm resources, but no specific mention of operation in the international market. Chinese strategy documents often call for increased involvement of Chinese companies in the supply chain for imported soybeans--in procurement, storage, processing, and trade segments--but this is the first mention of involvement in the seed segment.
A description of DBN's annual report to investors released on May 7 boasts about the Brazilian and Argentine licensing of its seeds and the "export technology, import bean" strategy as evidence of its innovation and international competitiveness. However, progress toward commercial production of GMO soybeans in China is going slowly. Chinese regulators approved 15 DBN genetically modified corn varieties last year, but only 1 DBN GMO high-oil soybean variety.
DBN began as a seed-breeding company, but it makes most of its money from pig feed and raising pigs in China. In 2024 DBN had animal feed sales of 19 billion yuan and pig sales were 6.28 billion yuan. Seed sales were only 1.4 billion yuan. Feed sales were down 20.68% last year, pig sales were up 10.1%, and seed sales were up 1.4%. The volume of hog feed sold declined 7.6% and volume of fish feed went down more than 20% in 2024. Despite the crash in feed sales DBN claims to have turned a financial loss in 2023 to a modest profit in 2024 through cost-cutting.
No comments:
Post a Comment