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CCM Data & Primary Intelligence

Seed Treatment Survey in China The first edition

Researched & Prepared by:

Guangzhou CCM Information Science & Technology Co., Ltd. Guangzhou, P. R. China

February 2010 Copyright by Guangzhou CCM Information Science & Technology Co., Ltd. (P.R. China) Any publication, distribution or copying of the content in this report is prohibited. Website: http://www.cnchemicals.com Tel: +86-20-3761 6606 Fax: +86-20-3761 6968 Email: econtact@cnchemicals.com

Website: http://www.cnchemicals.com Tel: +86-20-3761 6606

Email: econtact@cnchemicals.com Fax: +86-20-3761 6968


CCM Data & Primary Intelligence Description: Seed treatment industry has made remarkable progress in recent years, and shows attractive market potential in the future. China, consuming 41,277.23 tonnes agrochemicals in seed treatment with value of USD149.76 million in 2009, has become one of the largest consumption countries for seed treatment agents, though seed treatment rates for most crops are still low currently compared to foreign developed countries. With the increasing attention to seed treatment from Chinese government, seed treatment rate will certainly keep increasing in future years; meanwhile Chinese seed treatment industry will generate many new commercial opportunities. This report aims to provide right understanding about Chinese seed treatment and to find out investment risk and business opportunities in this field. Following aspects of seed treatment are emphatically covered in this report. - Governmental polices related to seed treatment. Such as raising direct grain subsidies, agricultural machinery subsidies, and improved varieties subsidies, enhancing environmental protection requirements, heightening industrial threshold, setting targets of raising seed treatment rate, and so on. - Seed treatment market structure. Chemical treatment, including seed coating, seed soaking, seed dressing and seed sealing, captures over 90% market share in Chinese seed treatment industry, while market scale and commercialization level of physical treatment and biological treatment is rather low. - Seed treatment market in major crops. Corn and wheat are the most important crops in seed treatment market, accounting for 85.67% of total seed treatment market in terms of value. And seed treatment in major production areas shows remarkable regional difference. - Market of seed treatment agents. Seed coating is the most popular chemical treatment technology in China, constituting 83.55% China’s total seed treatment market value in 2009, while pesticides and fertilizers treating seeds capture a small market share. - Risk assessment. Policy risk, industry competition risk, supply-demand fluctuation risk and technology risk are assessed, and proposals to avoid risk are provided in this report. - Commercial opportunities. With the increasing market demand for seed treatment, commercial opportunities, including industry integration, supply increase of commercial coated seeds, demand growth of low-toxic and highly effective seed coating agents, and demand increase of machineries for seed coating and sowing, etc., are recommended. This report is helpful to: Companies engaged in⎫ production, R&D and sales of seed coating agents, seed dressing agents, seed soaking agents, etc. Companies engaged in seed production, R⎫&D and sales. Analysts and consultants trying to gain insight into Chinese seed⎫ treatment market.

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CCM Data & Primary Intelligence Governments with attention paid to Chinese seed treatment⎍ market. Chambers of commerce and associations regarding seed⎍ treatment.

Main content: No.

I I-1 I-1.1 I-1.2 I-1.3 I-1.4 I-2 I-2.1 I-2.2 II II-1 II-1.1 II-1.2 II-1.3 II-1.4 II-1.5 II-2 II-2.1 II-2.2 II-2.3 II-2.4 II-3 III III-1 III-2 III-2.1 III-2.2 III-2.3 III-2.4 III-2.5 III-2.6 III-2.7 III-2.8 III-2.9 III-2.10 III-2.11 III-2.12 III-2.13 III-2.14

Content Executive summary Methodology Background Seed situation Seed market scale Seed market structure Seed companies Main opportunities and challenges of China's seed industry Significance of seed treatment for agricultural production Economic benefits Ecological benefit Seed treatment technologies Physical treatment Hot water treatment Electric field treatment Magnetic field treatment Plasma seed treatment technology Others Chemical treatment Seed soaking Seed dressing Seed coating Solvent sealing Biological treatment Seed treatment market in major crops General situation of seed treatment market Seed treatment market in major crops Wheat Corn Rice Cotton Soybean Peanut Rapeseed Vegetable Sugar beet Flower Chinese medicinal materials Watermelon Tobacco Others

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Page 5 9 12 12 12 13 14 14 15 16 17 18 19 19 20 21 22 23 23 24 25 26 26 27 28 29 30 30 35 39 44 48 53 56 58 60 63 64 67 71 73

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CCM Data & Primary Intelligence IV IV-1 IV-1.1 IV-1.2 IV-1.3 IV-2 IV-3 IV-3.1 IV-3.2 V V-1 V-2 V-2.1 V-2.2 V-3 V-4 V-5 VI VI-1 VI-1.1 VI-1.2 VI-1.3 VI-1.4 VI-1.5 VI-2 VI-2.1 VI-2.2 VI-2.3 VI-2.4 VI-2.5

Market of seed treatment agents Seed coating agents Development history Supply situation Trend Pesticides Fertilizers Supply situation Market volume and value Key influencing factors of seed treatment Environmental protection Economy Rural peasants’ affordability High return of investment Government’s attitudes and actions MNC’s investment and activities Others Risk assessment and opportunities of Chinese seed treatment industry Warnings and proposals for avoiding investment risks Policy risk Industry competition risk Supply-demand fluctuation risk Technology risk Others Opportunities Industry integration Supply increase of commercial coated seeds Demand growth of low-toxic seed coating agents Development of new seed coating formulation types Development of machineries for seed coating and sowing

75 75 75 76 81 82 83 83 84 86 86 86 86 87 88 89 90 91 91 91 93 93 94 94 94 94 94 95 95 95

Executive summary: As a key technology for diseases and pests prevention and grain yield growth, Chinese government has attached importance to seed treatment in recent years, taking the national grain safety into consideration. Physical treatment, chemical treatment and biological treatment are three classes of seed treatment technologies, among which chemical treatment captures over xxx% market share in Chinese seed treatment industry. Common chemical treatment methods include seed soaking, seed dressing, seed coating and seed sealing, etc. China consumed about xxx tonnes agrochemicals in seed treatment with total value of USDxxx million in 2009. Seed coating agents, pesticides and fertilizers accounted for xxx%, xxx% and xxx% of China’s total seed treatment market value separately in 2009.

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CCM Data & Primary Intelligence Seed treatment market in major crops has the following characteristics in China. - Wheat and corn are the most important crops in seed treatment market as they accounted for xxx% of total seed treatment market in terms of value. - Market scale and commercialization level of physical treatment and biological treatment is rather low compared with chemical treatment now in China. - Seed treatment difference in major planting regions is obvious in China, with relatively higher seed treatment rate in North China. - Large farmlands enjoy higher seed treatment rate. - Seed coating is the most popular chemical treatment technology in China. Market of seed treatment agents has the following characteristics in China. - The proportion of highly toxic seed treatment agents is decreasing in total seed treatment agents in China. - In Chinese market of pesticides treating seeds, fungicide formulations capture about xxx% share, and mixed formulations of fungicides and insecticides constitute xxx% share, while insecticides and plant growth regulators capture another xxx% share. - Though China is a large fertilizer producer and consumer in the world, application volume of fertilizers as seed treatment agents is very small, only about xxx tonnes in 2009. - Seed treatment rate of different regions and crops is distinct. It is influenced by many factors, such as environmental protection, economic level, governmental attitudes and actions, etc. Compared to foreign developed countries, Chinese seed treatment industry developed slowly in the past decades, and Chinese seed coating companies have weak competitiveness in international markets currently. Some potential threats still exist in the seed treatment industry, includes Policy risk, Industry competition risk and Supply-demand fluctuation risk etc. With the increasing attention from Chinese government, many commercial opportunities will generate in Chinese seed treatment, such as Industry integration, Supply increase of commercial coated seeds, Demand growth of low-toxic seed coating agent and Development of new seed coating formulation types

Character of CCM' Report: The aim of this report is to provide powerful assistance to the strategy group and the management team in making correct decision as how to penetrate the ever-increasing China market and how to catch the maximum commercial opportunities. The report is formulated independently by CCM’s professional market researchers, based on the first-hand and primary data which are analyzed by scientific methodology, confirmed with both manufacturers/end users/traders and legal authorities, and presented in a logic way.

Sample pagesďźš

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II-2 Chemical treatment Table II-2.1 Comparison of chemical treatment technologies Methods

Main

Effect

Application

Sustainable

Cost

time

components Seed soaking

XX

XX

XX

XX

Seed dressing

XX

XX

XX

XX

Seed coating

XX

XX

XX

XX

Seed sealing

XX

XX

XX

XX

Source: CCM International

III Seed treatment market in major crops China consumed about XX tonnes agrochemicals in seed treatment with total value of USDXX million in 2009. There is no doubt that wheat and corn are the most important crops in seed treatment market as they accounted for XX% of total seed treatment market value. Table III-2.1 Chemicals consumption volume in seed treatment, 2009, No.

Seed coating agent,

Pesticide,

Fertilizer,

Total,

tonne

tonne

tonne

tonne

Crop

1

Wheat

XX

XX

XX

XX

2

Corn

XX

XX

XX

XX

3

Rice

XX

XX

XX

XX

4

Cotton

XX

XX

XX

XX

5

Soybean

XX

XX

XX

XX

6

Peanut

XX

XX

XX

XX

7

Rapeseed

XX

XX

XX

XX

8

Vegetable

XX

XX

XX

XX

9

Sugar beet

XX

XX

XX

XX

10

Flower

XX

XX

XX

XX

11

Chinese medicinal materials

XX

XX

XX

XX

12

Watermelon

XX

XX

XX

XX

13

Tobacco

XX

XX

XX

XX

14

Others

XX

XX

XX

XX

Total

XX

XX

XX

XX

Source: CCM international

Table III-2.2 Chemicals consumption value in seed treatment, 2009 No.

Seed coating agent,

Pesticide,

Fertilizer,

Total,

‘000 USD

‘000 USD

‘000 USD

‘000 USD

Crop

1

Wheat

XX

XX

XX

XX

2

Corn

XX

XX

XX

XX

3

Rice

XX

XX

XX

XX

1


4

Cotton

XX

XX

XX

XX

5

Soybean

XX

XX

XX

XX

6

Peanut

XX

XX

XX

XX

7

Rapeseed

XX

XX

XX

XX

8

Vegetable

XX

XX

XX

XX

9

Sugar beet

XX

XX

XX

XX

10

Flower

XX

XX

XX

XX

11

Chinese medicinal materials

XX

XX

XX

XX

12

Watermelon

XX

XX

XX

XX

13

Tobacco

XX

XX

XX

XX

14

Others

XX

XX

XX

XX

Total

XX

XX

XX

XX

Source: CCM international

III-2 Seed treatment market in major crops III-2.1 Wheat  Planting situation China planted xx million ha. wheat in 2009 which consumed about xx tonnes seeds. Wheat is mainly planted in Henan, Shandong, Hebei, Anhui and Jiangsu, totally accounting for about xx % of China’s total in 2009. Table III-2.1.1 Planting situation of wheat, 2005~2009 Year

Planting area, '000 ha.

Total yield, ‘000 tonnes

Unit yield, kg/ha.

2005

xx

xx

xx

2006

xx

xx

xx

2007

xx

xx

xx

2008

xx

xx

xx

2009est

xx

xx

xx

CAGR, 05~09

xx

xx

xx

Source: Ministry of Agriculture of P.R.C., China National Grain and Oils Information Center

V-4 MNC’s investment and activities In 1990’s, most of the crop seeds market had been open except some hybrid seeds controlled by government. Seed companies in different types grew very rapidly, especially foreign companies. At present, more than xx foreign companies have entered Chinese seed market, mainly including Pioneer from Dupont, Dow Agrosciences, Syngenta Biotechnology China, Bayer Cropscience and Monsanto, etc. 2


The entering of foreign companies brings out fierce competition in Chinese market, and some foreign companies with good breeding technologies have occupied Chinese high end seed market. For instance, about xx % market share of vegetable seeds with high added value was taken up by foreign seed companies in China in 2009. Table V-4.1 Seed coating agents developed by foreign companies Foreign

Main seed coating

companies

agent

Trade name

Crop

Diseases and

pests

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

Source: CCM International

VI-1 Warnings and proposals for avoiding investment risks Compared with foreign developed countries, Chinese seed treatment industry has developed slowly in the past decades, and Chinese seed coating companies have weak competitiveness in international markets currently. With the improvement of seed treatment rate for main crops, seed treatment agents are expected to witness growth both in market volume and value in the future. But some potential threats are still existing in the seed treatment industry. Table VI-1.2 Risk assessment of Chinese seed treatment industry Risk

Risk level

Proposal

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

xx

Source: CCM International

3

Seed Treatment Survey in China  

This report is helpful to:  Companies engaged in production, R&D and sales of seed coating agents, seed dressing agents, seed soaking agent...

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