Growing population coupled with decreasing arable land across the world has been driving the demand for commercial seeds which yields optimum results desired from the crop. Increasing population has led to growing food demand in addition to growing urbanization. The rapid urbanization has been leading to decreasing farmable area across various nations. Commercial seeds are classified according to their type which includes conventional seeds and biotech seeds or GM (genetically modified) seeds. The key conventional seed types include maize (corn), soybean, vegetable, cereals, cotton, rice and canola. Biotech / GM seeds are genetic engineering seeds that are modified to exhibit superior features such as better shelf life and insect resistance. Factors responsible for market growth include use of hybrid seeds in Asia Pacific, acceptance of technology and favorable governmental regulations for use of biotech seeds. Additionally, biotech/ GM seed has a principle advantage of possessing multiple/stacked traits which will increase its market share as compared to conventional seeds.
Many new crops are being introduced in the GM seed segment as it being widely accepted by countries all over the world. However, issues relating to increase in soil corrosion, threats to endangered species, creation of poisonous weeds and lower yield are major challenges faced by the market. Latin America and Asia Pacific is expected to lead in production and consumption of commercial seeds including conventional and biotech seeds. The market has seen many mergers and acquisitions since 2001 which has lead to higher degree of consolidation. Future trends in the market are also pointing towards oligopolistic market scenario as a number of small firms will either opt for accumulation strategy or exit strategies. This will result in high concentration of the market consisting of only a few market players.
Conventional seed was the leading segment accounting for 52.9% of the commercial seeds market revenue in 2013. Maize seeds had the highest demand accounting for 44.0% of global seeds, followed by soybean and vegetable in 2013. Additionally, maize is expected to retain its position followed by Cotton which is expected to have 7.4% CAGR from 2014 to 2020. Biotech/GM seed is expected to be the fastest growing segment with estimated CAGR of 10.3% from 2014 to 2020. Soybean was the largest consumed biotech seeds in 2013 accounting for 42.5% of market revenue. The growing demand for soybean as a raw material for production of biofuels is expected to be a key driver for development of the market.
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North America dominated the global commercial seed market accounting for 30.6% of total market revenue in 2013. This is mainly because all the key players in the market are located in the US which leads to quicker delivery, no import/export regulations and lesser cost. Latin America is expected to be the fastest growing market for commercial seed at an estimate of 7.7% CAGR from 2014 to 2020. Latin America is also expected to lead the biotech seed segment with an expected CAGR of 11.2 % from 2014 to 2020. Asia Pacific is estimated to witness significant growth in commercial seeds market over the forecast period at an estimated CAGR of 7.5% from 2014 to 2020. China being the second largest consumer of seeds would result in Asia Pacific retaining its market share by accounting for 28.2% of the biotech segment revenue in 2013.
The global seeds market is fairly concentrated with top four companies’s accounting for nearly 50% of the market in 2013. The key companies in the market include Monsanto Company, DuPont Pioneer, Syngenta International AG and Vilmorin & Cie SA, KWS SAAT AG, Bayer CropScience and DOW AgroSciences among others.