BG Bunge Global SA

European Union officials approved a new variety of biotech soybean developed by Monsanto Co., the company said Friday.

The ruling removes uncertainty for Monsanto, which already had sold the seeds to farmers this year, and for grain companies, some of which had refused to purchase the soybeans from farmers without approval from the EU to import the crop once it had been grown.

EU officials said the soybeans had "gone through a comprehensive authorization procedure," including a scientific review by the European Food Safety Authority. The authorization lasts for 10 years, and doesn't permit the soybeans to be grown in the EU.

St. Louis-based Monsanto said Friday it plans a "full system launch in the United States in 2017" for the soybeans.

The soybeans, called "Roundup Ready 2 Xtend," are genetically modified to resist a more powerful combination of herbicides, and have been touted by Monsanto as a potential blockbuster at a time when slumping crop prices have withered profits for the seed company and for farmers. The company has estimated it will sell 15 million acres' worth of the seeds in the U.S. in 2017.

Monsanto sold relatively small quantities of the soybeans this spring to farmers in the U.S. under the assumption that EU officials would approve them on a similar time frame to prior biotech seeds the company had submitted.

But the EU continued its review for months, while member states debated whether to reauthorize the herbicide glyphosate, which Monsanto markets under the Roundup brand. The European Commission, the EU's executive arm, last month reauthorized glyphosate for 18 months after member states couldn't agree on an extension.

Without EU approval, some major grain-trading companies, like Archer Daniels Midland Co. and Bunge Ltd., said they wouldn't buy the Monsanto soybeans from farmers after they were harvested this year, for fear that some of those soybeans could erroneously wind up in EU-bound shipments and get rejected by import officials. Representatives for ADM and Bunge had no immediate comment on the approval.

Companies that buy, trade and process crops have been on guard for potential trade disruptions stemming from unauthorized biotech seeds after China began turning away some U.S. corn shipments in late 2013, citing a variety of pest-resistant corn developed by Syngenta AG that had yet to be approved. Grain companies claimed tens of millions of dollars in losses from the episode.

Monsanto still needs approval from the U.S. Environmental Protection Agency that would cover some applications of a more-powerful weedkiller, a combination of glyphosate and dicamba, that was designed for the company's new soybeans.

Write to Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

July 22, 2016 08:45 ET (12:45 GMT)

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