Swiss group Syngenta is set to benefit from soaring food prices as farmers invest in products to boost harvests and buy more weed and bug killers from the world's largest agrochemicals company.
Syngenta, seeking to outperform the market and increase profitability in coming years, posted a forecast-beating set of 2010 figures on Wednesday on the back of strong demand in emerging markets.
The group lifted its dividend a sixth to 7 Swiss francs, above a forecast for 6.14 francs, and said it was launching a $200 million share buyback program.
Syngenta shares, which had gained 12 percent this year, were up 2.9 percent at 0925 GMT to their highest levels since July 2008, outperforming a 0.7 percent rise in the European chemicals sector
"At the current commodity prices, farmers have plenty of opportunity to invest heavily in the crop inputs," chief executive Mike Mack told Reuters. "It is a good place for 2011."
Spiraling wheat, corn and soybean costs should encourage farmers to buy more products from Syngenta and rivals such as DuPont and Monsanto as they seek to boost yields.
Mack said the outlook for 2011 was bright as global GDP growth expectations were higher than for 2010, suggesting rising global demand for grain....MORE