SAO PAULO -- A Brazilian federal court late Thursday reiterated its June ruling which bans the planting and distribution of genetically modified soybeans in Brazil, the Brazilian Institute of Consumers' Defense (IDEC) said Friday.

The ruling favors the consumers' defense group and disrupts the plans of U.S. giant agribusiness company Monsanto Co. (MTC) for commercial distribution of its genetically modified Roundup Ready soybean seeds.

Their planting was expected to start in September, following the registration of the seed species in early June with the Agriculture Ministry.

Two weeks after the registration, however, the federal court issued a preliminary injunction on the GMO seeds, requiring that "the companies Monsanto do Brasil Ltda and Monsoy Ltda provide an environmental impact study...as a crucial condition of planting in commercial scale of the soy Roundup Ready." The companies are Brazilian subsidiaries of Monsanto.

With the EIA pre-requisite being reiterated late Thursday, the ruling is now definitive instead of preliminary, rendering any appeal by Monsanto less likely to suceed, a spokeswoman at IDEC told Dow Jones Newswires.

Monsanto officials weren't immediately available for comment.

The attempt to legalize the planting of genetically modified soybeans in Brazil has been fraught with contention.

Last September, Brazil's National Technical Commission for Biological Safety, known as CTNBio and part of the Science & Technology Ministry, declared the soybeans presented no threat to human or animal health, or any risk to the environment.

This decision has been challenged in the courts by IDEC, which in December obtained a ruling determining that all products containing the biotech soy be labeled as such. IDEC also fought and won a court battle requiring that Monsanto keep the altered seeds separate from the conventional ones, and declare who it sold the modified beans to as well as the volume of such sales. Monsanto is still trying to overturn this ruling, IDEC said.

Meanwhile, Brazil's southernmost state of Rio Grande do Sul - home to Monsanto research operations - prohibited the planting and sale of genetically modified soybeans in its territory, threatened to invade the research sites, and, together with the leading soy producing state of Parana, hosted the visit of European supermarket chains interest in assuring the supply of non-genetically modified products.

Monsanto, however, was granted the license to plant the five species of its Roundup Ready soy through registration with the Agriculture Ministry in May - seemingly a green light to commercial distribution of the seed. At the same time the species were registered, the Agriculture Ministry established commissions to look into the monitoring of planting and distribution of the seeds as well as labeling issues.

In Thursday's court ruling, the judge questioned why CTNBio approval was granted without an EIS. It also prevents the Agriculture, Science & Technology and Health ministries from taking any actions that contravert its ruling

Since the CTNBio approved the Roundup Ready seeds, its president and other members have resigned.

Brazil is the second largest exporter of soybeans, with 1999-2000 production estimated at nearly 31 million metric tons. The crop year starts in February.

Monsanto developed the Roundup Ready soy to resist its own herbicide of the same name, which is widely used in plantations in the U.S. and Argentina.

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