The global seed market size is estimated to account for a value of USD 63.0 billion in 2021 and is projected to grow at a CAGR of 6.6% from 2021, to reach a value of USD 86.8 billion by 2026. The growing demand for seeds from the food, beverage, animal feed, and biofuels industry is driving the growth of the market. Demand for seeds has witnessed steady growth in countries such as China and India. With these countries accounting for the largest population, an ever-increasing demand for food grains also drives the seeds market growth. In developed markets, farmers are trying to maintain the crop yield and increase their returns. This sustained approach from developed and developing countries in agricultural practices has been driving the global seeds market growth.
Seeds Market Dynamics
Driver: High adoption of biotech crops
Biotechnology is being used to develop stress-tolerant and more nutritious crop varieties to protect natural resources. According to the International Service for the Acquisition of Agri-biotech Applications (ISAAA), the area under bio tech crops has increased 113-fold from 1.7 million hectares in 1996 to 191.7 million hectares in 2018 – this makes biotech crops the fastest adopted crop technology in recent times. Biotech crops have expanded beyond the major crops such as corn, soybeans, cotton, and canola to other crops such as alfalfa, sugar beets, papaya, squash, eggplant, potatoes, and apples. Additionally, biotech crop research conducted by public sector institutions includes rice, banana, potatoes, wheat, chickpea, pigeon pea, and mustard with various economically-important and nutritional quality traits beneficial to food producers and consumers in developing countries.
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Constraint: High R&D expenses on quality seed development lead to high seed price
The seed industry is one of the most R&D intensive industries. The R&D spends vary between companies depending on the company’s strategy and choice of techniques. This is in stark contrast with the crop protection industry, where a majority of the leading companies have a similar percentage of the sale on R&D. Due to erratic climatic conditions and high demand for food from end consumers, the adoption of genetically-modified seeds is higher among farmers. The cost of developing GM seeds is higher, thereby pushing up the price of the seed. Certain companies have a pioneering position in the development of GM seeds with specific traits (insect resistance and herbicide tolerance), due to which they are in a better position to charge a premium for their products (seeds). Hybrid seeds and organic seeds of different varieties of vegetables and fruits such as tomatoes, apples, grapes, and melons also cost higher than the average price of seed; farmers could use existing seeds from the previous harvest cycle to reduce the overall expenditure on seeds. This could have a negative impact on the growth of the market for seeds.
Opportunity: Molecular breeding in seeds
The molecular breeding technique is the most promising technology that is used for developing seeds. Gene-tagged markers help in reducing the time consumed in the selection of the desired genes in progenies and parents. Marker-assisted selection, QTL analysis, and genetic transformation are some of the key techniques that have been used as tools for oilseed molecular breeding. Chinese breeders have identified various traits such as high-quality grain and yield, pest resistance, and abiotic tolerance with the help of QTL analysis. To get better and faster results, many genetic breeding techniques have been developed in the past few years.
Challenge: Commercialization of fake hybrid seeds and counterfeit of products
According to the International Seed Federation (ISF), there has been an increase in illegal seed practices, including counterfeit seeds, fake seeds, fraudulent labelling, infringement of intellectual property, and regulatory offenses. Over the years, there has been an increase in the number of incidents reported the counterfeit of labels and bags of seeds being sold in developing nations. The phenomenon is largely driven by the fact that low-income farmers are not in a position to purchase seeds in large quantities. This paves the way for the sellers to breakdown the bags, repack them in smaller volumes and sell them in loose form. This creates an opportunity for adulteration.
By type, the genetically-modified seeds are projected to be the fastest-growing segment in the seeds market during the forecast period.
Genetically-modified seeds are projected to account for the fastest-growing segment. The Genetically modified seeds enable farmers to reduce their running costs significantly, for example, agrochemical treatments, while guaranteeing a much more abundant harvest. They are therefore sold at a significantly higher price than conventional seeds.
Cereals & grains segment by crop type is projected to account the largest market share for seeds market in 2021.
Cereals & grains segment holds the largest market share as the crop type is consumed on large scale as staple food in across the globe. The growing demand for healthy food options, coupled with the high intake of breakfast cereals in the diets of consumers, is propelling the growth of the cereals & grains market, which is important reason for the increased demand for these seeds for cultivation among farmers. A report by the FAO states that global cereal production is set to expand at an extremely fast rate of approximately 12% by 2025, due to increasing production in countries such as the US, Canada, India, and China. GM seeds of corn and sorghum have high value among crop growers in the seeds market. Owing to all these factors, cereals & grains account for large market share and is estimated to grow at a descent rate during the forecast period.
Asia Pacific to be the fastest growing market during the forecast period.
The seeds market in the Asia Pacific region is projected to grow at the highest CAGR during the forecast period. Supportive regulations and an increase in food and feed demand are also driving their adoption, along with subsidy provisions for their acceptance in these markets, especially in the Asia Pacific region.
Key Market Players
Some of the major players operating in the seeds market include BASF SE (Germany), Bayer AG (Germany), Syngenta Group (Switzerland), KWS SAAT SE (Germany), Land O’ Lakes (US), Sakata Seed Corporation (Japan), Groupe Limagrain (France), Corteva Agriscience (US), United Phosphorous Limited (India), DLF (Denmark), Longping Hi-tech (China), Rallis India Limited (India), Enza Zaden (The Netherlands), Takii & Co. Ltd (Japan), and Barenbrug Holding B.V (Netherlands). They also have manufacturing facilities along with strong distribution networks across these regions