California court rules Nufarm’s glyphosate-based herbicide caused cancer

Given the widespread usage of glyphosate in agriculture, no wonder investors are jittery. Although Bayer-owned Monsanto has stood by its stance that its herbicide is safe for human use, in practice taken steps to reduce concentration levels of the chemical from its products.

On Monday, shares of Nufarm Ltd, which produces a weedkiller similar to that of Monsanto, plummeted following the findings of a California court which ruled that the Monsanto weedkiller caused cancer in a school grounds keeper.

Shares of Nufarm Ltd fell by 17% to their two year low.

On Friday, a California jury held that Monsanto’s glyphosate-based weed-killers caused to the man cancer and ordered it to pay $289 million in damages.

As per analysts’ estimates from Macquarie Bank, Nufarm earns around a fifth of its revenue from products containing glyphosate, the world’s most widely-used herbicide.

“There is longer term regulatory risk (regarding) this, if (we) do see a change of regulatory stance over time,” wrote Macquarie’s analysts in a note which was published on Monday.

Another reason for the battering of Nufarm’s stock is because of the profit warning it issued in July citing lower demand for its crop-protection products.

Nufarm has sought to allay investor’s fear saying it does not expect glyphosate-related issues that have arisen over the past week to “have any impact on Nufarm’s business”.

“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,” said Nufarm in a statement.

Bayer AG-owned Monsanto said, decades of scientific studies have shown that glyphosate is safe for human use. Nufarm will appeal the verdict.

In September 2017, the U.S. Environmental Protection Agency concluded a decades-long assessment of glyphosate’s risks and found that the chemical is not likely to be carcinogenic to humans. In contrast, in 2015, WHO’s cancer arm classified glyphosate as “probably carcinogenic to humans”; earlier this month, Brazil suspended the usage of glyphosate for 30 days while it weighs its options.

In 2016, The Weekly Times quoted Nufarm Managing Director Greg Hunt as saying the firm had “worked very hard to reduce its reliance on glyphosate” from 50% to 20%.

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