Cotton cultivation in India is increasingly relying on genetically modified (GM) seeds, and that presents an opportunity for Delta and Pine Land
Delta and Pine disclosed this week that it has purchased Syngenta's
The timing of the deal looks good, since India recently announced it has approved more GM cotton varieties for actual use, as well as large-scale trials of others. India, the world's third-largest cotton producer, has increasingly been embracing GM crops to boost production. Since 2002, the area in which GM cotton is cultivated has tripled to 1.5 million hectares, according to Reuters. The country's cotton production is expected to increase to 25 million bales for the year ended September 2006, up from 21.5 million in the prior year, an improvement some attribute to the proliferation of genetically engineered seeds.
Still, Delta and Pine is not a leader in this burgeoning market. The company that has made its name in transgenic crops, Monsanto
Delta and Pine remains the world's largest cottonseed producer, thanks to its large share in the U.S. But global agriculture is changing, and developing countries like India are emerging as important producers. Delta and Pine's latest acquisition shows that the firm is attuned to these changes, but more acquisitions in the subcontinent appear to be in order if it hopes to effectively compete against Monsanto.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.