Syngenta AG, the world’s biggest maker of agricultural chemicals, may raise the price of pesticides by 10 percent next year as record oil increases the cost of raw materials.
Costs at Syngenta will rise by $30 million to $50 million this year, Chief Executive Officer Michael Mack said in an interview at a research site in the Swiss village of Stein. Syngenta, based in Basel, Switzerland, uses oil derivatives in its crop protection products.
“We could be looking at something like a 10 percent price increase” for customers if crude continues to gain, said Mack. He didn’t say how much oil would need to rise to justify such an increase.
Syngenta raised prices 3 percent in the first quarter, joining global chemical makers seeking to preserve margins. Dow Chemical Co. plans increases of as much as 20 percent for all its products. Syngenta, which starts to set U.S. and European prices in the fourth quarter, expects earnings growth of more than 20 percent this year, Mack reiterated in the June 13 interview. Higher grain prices are prompting farmers to spend more on crop protection.
While crop protection products and other chemicals account for about 80 percent of the cmpany’s annual revenue, Syngenta also is accelerating spending on new seeds and genetically modified traits.