Increasing stevia acreage by over 135%

Zacks

Increasing stevia acreage by over 135%

Ian Gilson, CFA

On April 23, 2012 S&W Seed Company (SANW) announced it had leased 156 acres near Los Banos, CA and will dedicate all of these acres to stevia production. This is not far from the 114 acres in Chowchilla, CA where the first crop was planted.

Stevia seeds have a very low germination rate in India, China and many other parts of the world. S&W Seed has been able to increase this substantially and now has enough of the higher stevia yielding plants from the Chowchilla crop to fully utilize the additional acres.

The land has been leased for four years and has been tilled and irrigated and is ready for planting. These plants may be stronger and be more vigorous than the first crop. They may also produce even higher levels of stevia compounds.

Stevia demand in the US is amongst the highest in the world. It is now possible to buy fruit flavored drinks that are sweetened with stevia. A stable and dependable source of stevia leaf in the US is important to the producers of the steviol glycosides. The extraction of the glycosides is not much more difficult than making a cup of tea and is not capital intensive.

To view a free copy of our most recent research report on SANW or subscribe to our daily morning email alert, visit Ian Gilson's coverage page at http://scr.zacks.com/.
 

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