Netherlands-based seed company Nidera will develop new genetically modified (GM) soybean varieties for warm climes in Paraguay, the world's No.4 soy exporter, company and public officials said on Wednesday.

"Nidera informed us it will establish an office here in the coming weeks, start trials and rent two plots of land for experimental purposes," said Paraguay's deputy farm minister Carmen Galdona.

Last year, Paraguay approved four GM soy varieties for planting that were developed by U.S.-based biotech giant Monsanto Co., in a move to reduce illegal seed sales. Black markets for biotech seeds flourish in Argentina and parts of Brazil as well.

lt is estimated that between 60 percent and 70 percent of Paraguay's soy crop is genetically modified, public and private data shows.

"Paraguay is giving signals that it wants to respect the incorporation of technology," said Oscar Mersan, the legal representative of Nidera's Paraguay unit.

Mersan said the company will focus on designing biotech soybeans that adapt well to Paraguay's subtropical northeastern region.

Nidera expects tc test 20 soy varieties in the next growing season, which begins in October, along with types of sunflower seeds, sorghum and corn.

In the 2004/05 season, Paraguay produced 3.5 million tonnes of soybeans, much less than originally forecast due to a crippling drought.

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