SAO PAULO  - Monsanto Co hopes to roll out a new bioengineered, worm-resistant soybean seed for planting in Brazil next season, the firm's local president said, but a successful launch is tied to approval from top-buyer China.

So-called Intacta RR2 Pro is the first genetically modified seed Monsanto has developed exclusively for South America and as it is designed to produce higher yields, it could help Brazil surpass the United States as the world's top soybean producer, building on this year's record crop.

But not without a green light from China, which buys 70pc of Brazilian soybeans and could create a major headache for Brazilian farmers and exporters next season if it does not approve the technology. More than 40 countries have approved the technology, but China has not for unknown reasons. The situation highlights how much Brazil's giant farm sector and overall economy has become hitched to the Asian giant, which is its top trading partner but can be a fickle customer.

"We expect to have Chinese approval in the coming months so that when soybean planting starts in October or November, farmers can plant Intacta," Monsanto President in Brazil Rodrigo Santos told Reuters in an interview. He said the Chinese had completed technical studies on the seed and Monsanto is expecting an official sign-off from the agriculture ministry.

The recent regime change in China may have slowed the process, Santos said. Intacta seeds were planted in test fields across Brazil this year and if any of them make it into cargoes bound for China, it could give the country reason to reject an entire shipment.

The Chinese have already spooked the local soybean market this season by canceling orders because of slow delivery from Brazil's congested ports. Futures prices fell on the news.

Brazil's soybean output has swelled thanks to ample Chinese demand and to GMO technology Monsanto began selling in Brazil in 2005, known as Roundup Ready. It is present in 85 percent of Brazil's soy fields and is designed to withstand an herbicide known as glyphosate that kills invasive weeds.