In
the past decades, China’s seeds industry has been growing at a very fast pace
and is likely to continue so in the future. After all, this industry will face
new development opportunities but still overcoming challenges.
The
middle kingdom is currently the second largest seed market in the world, right
after the USA. The annual planting amount of seeds is accounted by 12.5 million
tonnes, granting a market value of USD17.2 billion. China has achieved great
success in the promotion of reform and innovation in the seed industry.
China
is massively investing in the agricultural and agrochemical industry with
mergers and acquisitions of foreign enterprises. These are crucial for the
government to ensure the sufficient supply of food, especially meat products,
for a growing middle class with a higher demand on nutrition.
To
upgrade protection of new seed species, green channels for variety
certification were opened for companies featuring an integration of R&D,
production and sale. More profits were given to scientific institutes and
staffs to encourage cooperation with seed companies and promote the transformation
of R&D results. In addition, integrated seed producers were exempt from
income tax and, even better, enjoy development funds, which were introduced to
the seed industry to accelerate the merger, reorganisation and growth of
producers.
The
country is furthermore investing more in the scientific research of seeds to
improve the domestic crop yields and become more independent in agricultural
production.
Currently,
of the 350 main agricultural products available in China’s market, about 33% have
been originally imported from overseas countries. The share of seeds in China
is highly dependable on the kind of seeds. For example, seeds for carrots or
spinach are mostly covered by foreign suppliers, while rice and wheat seeds can
be covered by domestic production. After all, the country is self-sufficient in
rice, corn, wheat, cotton, and soybean seeds, and produces 80 percent of the
vegetable and fruit seeds which is demanded
Overcoming challenges
For
a long period, many small-sized companies existed in China's seed market,
causing a lot of problems in efficiency, investment and organisation. In order
to facilitate the modernisation of China's seed industry, the government stated
clearly the dominant position of enterprises in a document issued in 2011. The
Ministry of Agriculture of the Peoples’ Republic of China (MOA) and relevant
departments have taken many actions to optimise current legal system
and consolidate the companies' position. In this context, great changes were
seen in the seed industry.
One
of the largest changes is concerning the industrial concentration. The high
number of seed companies in China dropped massively in the last 6 years from
almost 9,000 ones to about 4,300. The market concentration was increased as a
result, leading to a market share of more than one-third by the 50 largest
producers.
Secondly,
in recent years, a majority of seed enterprises in China have increased their
investment into R&D, Statistics show that the R&D investment of China's
top 50 seed producers hit USD207.54 million, accounting for 7.4% of the total
sales.
The
market value of domestic seed industry keeps growing. In 2016, the market value
reached USD18.49 billion, up by 18.50% since 2012. The value of major crops
increased by 13.80% and that of other crops rose by 24.90%. Non-major crops
showed faster growth rates.
China's
seed companies are mainly engaged in the sale of major crops' seeds. Of all
4,316 seed enterprises, 3,390 of them sell self-developed seeds, with 84% of
them selling seeds of major crops. Also, 88% of 90 seed producers which feature
an integration of R&D, production and sale, mainly focus on the business of
major crop seeds. On the other hand, China imported USD0.30 billion seeds in
2016, 61% of which were vegetable seeds.
The
key producers of seeds in China are Shandong Denghai Seeds, Yuan Longping,
Gansu Dunhuang Seed, and Winall Hi-Tech Seed. They are all involved in the
production of either corn or rice seed.
About CCM
CCM
is the leading market intelligence provider for China’s agriculture, chemicals,
food & ingredients and life science markets.
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