RPT-Monsanto develops plan for GMO U.S. soy lacking EU import approval

(Repeats June 7 story for wider distribution)

CHICAGO, June 7 (Reuters) - Monsanto Co is developing plans to prevent a new variety of biotech U.S. soybeans from entering European markets where they are not approved, leaders of two agricultural trade groups said, in a sign of the growing impact of regulatory delays on the world’s largest seed maker.

The company is working with representatives of the U.S. farm sector on a strategy to keep Xtend soybeans separate from varieties approved in all major export markets, said Jim Sutter, chief executive officer for the U.S. Soybean Export Council. The plan could be used if Europe does not clear imports before harvesting starts in August.

Monsanto had no immediate comment on Tuesday.

The company launched Xtend soybean seeds, engineered to resist the herbicides glyphosate and dicamba, before obtaining clearance for crop shipments to Europe because executives were expecting approval early this year.

The product is designed to replace hugely popular Roundup Ready soybeans planted nationwide and its release could represent Monsanto’s biggest technology launch ever, according to the company.

But European import approval still has not come, prompting the world’s top grain handlers to declare they will reject Xtend soybean deliveries to avoid trade disruptions.

“They’ll obviously have to channel it so it doesn’t go to the European market,” Sutter said of Monsanto. He declined to offer more details.

Richard Wilkins, president of the American Soybean Association, also said Monsanto was working on a plan for Xtend soybeans if Europe’s approval comes too late. The association, which represents farmers, has asked Monsanto to present the plan next month, he said.

“We are particularly interested in preventing anything from disrupting international trade,” Wilkins said.

Last month, Monsanto told agricultural organizations in a letter that it hoped for European approval before summer and was not “yet in a place where harvest contingency plans are needed.”

Rivals, including Syngenta AG and Dow AgroSciences , in recent years have launched programs that specify where farmers must deliver biotech crops lacking approval in key markets or how they can use the harvests domestically.

The United States is the biggest producer of GMO crops and has long been at the forefront of technology aiming to protect crops against insects or allow them to resist herbicides.

That innovation is now seen as a risk to trade because it is hard to segregate crops containing traits lacking import approvals from the billions of identical-looking bushels exported every year.

China roiled global grain trading two years ago after it rejected boatloads of U.S. corn containing a biotech Syngenta trait that had not been approved for import.

Since then, the Swiss-based seed company has partnered with grain handler Gavilon, owned by Marubeni Corp, to oversee U.S. harvests of Duracade corn, another biotech variety that lacks China’s approval.

Gavilon declined to comment on Xtend soybeans.

Associations representing grain handlers and processors, in a letter to Monsanto on May 7, asked the company’s plans for Xtend soybeans if Europe does not approve imports before harvests.

Delays in the review come as soybean and soymeal prices have surged amid crop woes in Argentina, which are expected to increase demand for U.S. soy shipped to Europe.

One grain group, the National Grain and Feed Association, has told members of reports linking the timing of Europe’s decision on Xtend soybean imports to the relicensing of glyphosate, sold by Monsanto and other companies.

On Monday, European nations refused to back a limited extension for the use of glyphosate. (Additional reporting by Karl Plume in Chicago; Editing by Matthew Lewis)