It wasn’t drought this time but a US court decision which saw Nufarm shares fall 13% yesterday – the second bout of weakness in a month.
Nufarm shares fell 11% on a July 23 trading update which revealed that its Australian profits had been all but wiped out by the growing drought and that group earnings would be sharply lower as a result.
Yesterday the company issued a statement trying to clarify a US court decision last Friday that awarded substantial damages against US company Monsanto, and its key chemical product, glyphosate.
That saw the shares lose from Friday’s close, ending the session at $6.56, a two and a half year low. They are down more than 22% since the end of trading on Friday July 20.
Nufarm’s letter says neither the Monsanto decision nor a Brazilian glyphosate suspension should affect Nufarm’s business.
On Friday a Californian jury found Monsanto liable in a lawsuit filed by a man who alleged the company’s glyphosate-based products caused his cancer. "This finding was against Monsanto. It is fully expected that Monsanto will appeal this decision,” Nufarm said
"On 6 August, a Brazilian judge ruled that the existing registrations of Glyphosate would be suspended within the next 30 days, until the government completes its regulatory review of the product. This review has been ongoing for approximately 10 years,” the added.
“It is expected that a number of agriculture‐related associations will lodge appeals against this ruling, including the local crop protection association, the Brazilian health agency, ANVISA, and the Brazilian Ministry of Agriculture. Those appeals are expected to be lodged this week. Nufarm anticipates being able to continue to sell Glyphosate in Brazil in the upcoming soybean season.
"Regulatory authorities around the world have approved the use of Glyphosate, including the US Environmental Protection Authority, the APVMA here in Australia and more recently, the European Food and Safety Authority. The product has a 40‐year history of safe use and continues to be an important tool for farmers. Nufarm will continue to work with regulatory authorities around the globe to maintain its Glyphosate registrations,” the company’s letter said.
