State Council announces reforms to stimulate seed industry

On 25 Dec. 2013, the State Council of the People's Republic of China issued an announcement on its portal, titled "Opinions on Deepening the Reform of Crop Seed System to Increase Innovation Capability" (the Opinions). The statement is expected to mature into specific guidelines for the future development of China's seed industry.

The Opinions emphasize the following aspects: allowing complete market determination in resource allocation; providing support to seed enterprises by introducing talented workforce, technology and resources; protecting the legitimate interests and rights of scientists over their inventions and creations; improving companies' innovation capabilities; and establishing a commercial breeding system.

Six measures proposed by the Opinions

To strengthen seed enterprises' leadership in technological innovation

Seed enterprises are encouraged to increase investments in R&D and establish joint-stock R&D institutes; scientific research institutes and institutions of higher learning (including universities and colleges) deemed of public interest shall be separated from seed enterprises established by them by the end of 2015, and other scientific research institutes shall be gradually transformed into enterprises (after reforms, the researchers' years of work in their original institutes shall be counted towards their pensions); new innovation platforms of seed industrial technology, such as national and provincial technical research centers, enterprise technical centers, and key laboratories, will be preferentially established in seed enterprises qualified for operating in the breeding, production and promotion fronts; among others.

To stimulate researchers' enthusiasm

Breeding materials, techniques, new varieties, and technological achievements in general developed by research centers and other institutions of public interest (including universities and colleges) with the use of national funds, are eligible to apply for intellectual property rights, and may be assigned monetary value and count as investment shares in seed enterprises; public trading platforms for technological achievements in the industry will be established; regulations for the transactions will be enacted, with private deals prohibited; cooperation between research institutes and enterprises is to receive full support; and researchers are encouraged to join enterprises and engage in commercial breeding; among others.

To intensify efforts to tackle problems in national crop breeding

Five-year plans for the breeding of major crops, such as rice, corn, rapeseed, soybean and vegetables will be designed. The aim is to improve the industry's scientific and technological innovation capabilities, by achieving core breakthroughs in key areas, such as germplasm, new varieties and the efficient propagation of seeds; the country shall help further companies' commercial breeding through various research programs and special projects, and attract social capital to participate in and emphatically foster seed enterprises that incorporate the three levels, breeding, production and promotion; research and breeding platforms shall be created, cooperation between enterprises and research institutes shall be closely established; and so on.

To improve basic and public interest research

Study fields related to the seed industry shall be strengthened; research centers and institutions of higher learning shall receive support to engage in basic and public interest research in areas such as breeding theory, general technology, and innovation of seeds, with the aim of developing modern molecular breeding technologies and methods, and creating new cultivars featuring high resistance, quality and yield; national research funds for these objectives shall be increased, while investments in the commercial breeding of hybrid rice, hybrid corn, hybrid rapeseed, hybrid cotton and vegetables conducted by research institutes and universities shall be gradually decreased; the preparation for and conduction of a national medium-to-long term plan for germplasm conservation and utilization of crops and forests shall be accelerated; and so on.

To accelerate the construction of seed production facilities

Policy support to major seed production facilities shall be increased and infrastructure for the construction of seed and seedling production facilities shall be laid down; a series of policies shall be implemented, such as insurance on seed production, subsidies on fine wood seeds and seedlings, and awards for major grain crop seed producing counties; the transfer of land-use rights to large seed producers and farmer cooperatives through land shares and land lease shall be promoted; among others.

The news sourced from Seed China News released by CCM in January.

Table of Contents of Seed China News 1401:

Key events in China's seed industry in 2013, part 1

State Council announces reforms to stimulate seed industry

Five changes in the Examination and Approval Measures for Main Crop

Origin reports profit growth in FY2013

Heilongjiang tomato seed market improving

Oversupply of hybrid rice seeds to continue in 2014

Terminal sales: new marketing trend for corn seeds

Beijing Shenzhou: space mutation breeding to boost agricultural development

Heilongjiang soybean market still depressed in 2013

Autumn planting of rapeseed in Anhui in 2013/2014

Seed China News, a monthly publication issued by CCM at the end of every month, mainly covers a diversity of topics, including market dynamic, company dynamic, crops, seed market, etc. With the latest news in seed industry and in-depth analysis on government direction and market competition, Seed China News can provide you with valid information which would help you make rational decisions in investment, production, marketing, etc.

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Performance overview of listed seed companies in H1 2012

In H1 2012, the performances of listed seed companies present obvious differentiation, caused by industrial changes and operating strategies. Judging from the financial reports of the listed seed companies, industrial competition has been intensified. However, the seed players which are able to make reasonable adjustments to their operating strategies can often achieve a sound development, while the conservative players are often at a disadvantage in the competition. For domestic seed companies, an excellent variety with great potential usually means handsome profits, providing a powerful support for their business growth, according to CCM’s August Issue of Seed China News.

The oversupply of corn seeds is becoming more serious in 2012, following the similar situation in previous years. The homogeneous competition is rather common among domestic corn seed producers, mainly relying on promoting some old corn varieties which have entered the market for years. Mainly owing to the increasing costs of production materials and labor costs, the overall gross profit margin of corn seeds would have shown a downward trend. While for some listed seed companies which try to provide excellent seeds or promote new corn varieties with better integrated traits, they would be able to enhance their overall profit margin of corn seeds.

 

Taking Hefei Fengle Seed Co., Ltd. (Hefei Fengle) for example, the profit margin in corn seeds in H1 2012 sees a significant decline over the same period of last year. Actually, the company has cut its corn seed output in its production base of Gansu Province, mainly in view of the increasing production costs and the oversupply of corn seeds in national market. In addition, some old corn varieties such as "Xundan 20" and "Jidan 7" are still Hefei Fengle's main sources of revenue in corn seed business.

 

The unsatisfactory performances of Gansu Dunhuang Seed Co., Ltd. (Gansu Dunhuang) and Shandong Denghai Seeds Co., Ltd. (Shandong Denghai) in H1 2012 has caused a widespread concern in the industry. In previous years, the two companies greatly benefited from their separate joint ventures with Pioneer Hi-Bred International Inc., thanks to the sound performance of corn hybrid "Xianyu 335". Unfortunately, both the sales and profits of "Xianyu 335" seeds decreased sharply in 2012, which could be primarily attributed to oversupply of corn seeds in current market. As a result, Shandong Denghai has a declining performance and Gansu Dunhuang suffers a net loss in H1 2012.

 

For Yuan Longping High-tech Agriculture Co., Ltd. (Longping High-tech) which has been enhancing corn seed business, its revenue in corn seeds sees a sharp growth in H1 2012, mainly owing to the enlarged promotion of corn hybrid "Longping 206". However, its gross profit margin in corn seeds shows a certain decrease, mainly due to the rising production costs in the period.

 

In corn seed business, Winall Hi-tech Seed Co., Ltd. (Winall Hi-tech) has an increasing performance after acquiring two corn hybrids: "Gaoyu 2067" and "Yangguang 98". As a technology-oriented hybrid rice company, Winall Hi-tech is actively exploring its corn seed business. In H1 2012, Winall Hi-tech has a sharp growth in corn seed, with the gross profit margin increasing from 19.05% to 32.36%.

Compared with corn seed market, rice seed market has a relatively relaxed situation, reflected in light of oversupply and upward profit margin. There have been diversified hybrid rice seeds in the market, thanks to the advanced hybrid rice breeding level at home. Overall, hybrid rice seed companies which deliver higher-value rice seeds to farmers are able to make handsome profits. For example, Longping High-tech, Winall Hi-tech and Grand Agriseeds Technology, Inc. (Grand Agriseeds) generate increasing profits from hybrid rice seeds in H1 2012.

 

For Longping High-tech, the revenue and gross profit margin in hybrid rice seeds continue to increase in H1 2012, mainly attributed to its leading hybrid rice variety: "Y Liangyou 1", which was bred by Hunan Hybrid Rice Research Center (HHRRC). Moreover, "Shen Liangyou 5814", a super rice variety approved in 2012, has been well recognized by rice growers, thus contributing rising sales and profits to Longping High-tech.

 

The increasing exports of hybrid rice seeds would provide a force for domestic hybrid seed industry. As a world leader in developing rice hybrid technology, China has gradually increased the exports of hybrid rice seeds or enhanced foreign aid on hybrid rice technology in recent years. Under such the situation, domestic hybrid rice companies intend to develop or explore overseas markets. In terms of export value of hybrid rice seeds, Winall Hi-tech and Grand Agriseeds generate the growth of 91.23% and 88.49% in H1 2012, respectively.

 

The oversupply of hybrid rice seeds should not be ignored at home. Owing to continuously updated hybrid rice varieties and increased seed output, the competition in hybrid rice markets would be more and more intense in future. It is known that Guangdong Golden Rice Seeds Co., Ltd., a prominent hybrid rice company in South China, has reduced its hybrid seed production and promotion of some small varieties, in view of declined sales and intensified competition.

Diversified operation in seed products would be a good choice for domestic seed companies. For Longping High-tech and Winall Hi-tech which are striving to develop corn seed business while further enhancing their core business: hybrid rice seed, both witness a sound performance in H1 2012. Aiming to reduce the risk of single business, Grand Agriseeds is actively adjusting its operating structure of crop varieties, by enhancing the breeding and promotion of new corn varieties. However, Hefei Fengle which has a performance decline in seed business in H1 2012 has expanded other businesses like spice and agrochemical, with sales proportion over 50% of the total.

 

It is expected that Longping High-tech and Winall Hi-tech would seed continuous growth in the coming few years. It's reported that Longping High-tech already signed an agreement with Hunan Hybrid Rice Research in Nov. 2011, indicating that Longping High-tech will exclusively commercially operate all rice varieties bred by the latter by paying USD1.58 million (RMB10 million) each year. For Winall Hi-tech which is expert in hybrid rice breeding, its developing corn seed business and wheat seed business will generate more profits in future.

 

Shandong Denghai and Gansu Dunhuang, two leading corn seed producers at home, would undertake great pressure in H2 2012. In view of the decreasing performance of "Xianyu 335", the two companies will enhance the operation of other corn hybrids in future. For example, Gansu Dunhuang is striving to promote its new purchased corn hybrid: "Jixiang 1" and Shandong Denghai is strengthening the promotion of self-developed corn hybrids such as "Denghai 605".

Source: Seed China News 1209

http://www.cnchemicals.com/Newsletter/NewsletterDetail_28.html

Content of Seed China News 1208:

Variety registration system expected to be improved or canceled

Performance overview of listed seed companies in H1 2012

Origin advances GM and hybrid corn breeding

Market situation of watermelon seed in Guangxi

Stress tolerance of alfalfa to be strengthened

Greenhouse cucumber cultivation rising in northern China

How to save China's non-GM soybean?

Rapeseed planting area continuously decreasing in Hubei

"Y Liangyou 2" with "Y58S" exclusively promoted by Anhui Yuanliang

F-type three-line hybrid wheat to realize industrialization

Ex-factory price of DETCL keeps decreasing

For more information about CCM’s Seed China News, please contact us at econtact@cnchemicals.com.

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1205.html

Find Hot News in Seed China News 1208

Published on the 31^th every month, Seed China News  is a monthly publication released by CCM. It offers timely update and close follow up of China’s various kind of seed market dynamics, analyze the market data and trends. Major columns include market dynamic, company dynamic, raw material supply, price update, import & export analysis, consumption trend & competitiveness.

Following are headline news of the latest issue of Seed China News:

Variety registration system expected to be improved or canceled

China's variety registration system is presenting a series of drawbacks, hindering the process of crop commercial breeding and the development of seed industry.

Performance overview of listed seed companies in H1 2012

In H1 2012, the performances of listed seed companies present obvious differentiation, caused by industry changes and operating strategies.

Origin advances GM and hybrid corn breeding

Origin is striving to rank as a top technology-oriented seed company, relying on its outstanding advantages in biotechnology combining hybrid breeding.

Market situation of watermelon seed in Guangxi

Guangxi is an important watermelon planting area in China, attracting a number of seed companies both at home and abroad.

Stress tolerance of alfalfa to be strengthened

The breeding orientation of alfalfa would be targeted at stress tolerance such as salt tolerance, low temperature resistance, high resistance to pests and diseases.

Greenhouse cucumber cultivation rising in northern China

The planting area of cucumber in open field has been decreasing in northern China and greenhouse cucumber cultivation is rising.

How to save China's non-GM soybean?

There is still a glimmer of hope for reviving China's non-GM soybean industry confronting shrinking planting and increasing import of GM soybean.

Rapeseed planting area continuously decreasing in Hubei

Hubei, a key rapeseed planting region in China, has been confronting a continuous shrinkage of rapeseed planting area in the past three years.

"Y Liangyou 2" with "Y58S" exclusively promoted by Anhui Yuanliang

"Y Liangyou 2" with the female parent "Y58S" is exclusively promoted by Anhui Yuanliang Rice Industry Co., Ltd.

F-type three-line hybrid wheat to realize industrialization

The industrialization of F-type three-line hybrid wheat is expected to be realized in the coming few years, greatly enhancing domestic wheat output.

Corn suffers armyworms in Northeast China

Corn suffers armyworms in Northeast China

Hybrid rice commercial breeding center settled in Sichuan

Hybrid rice commercial breeding center settled in Sichuan

A corn research institute founded by Xinjiang Tianyu

A corn research institute founded by Xinjiang Tianyu

Vietnam relies on imported rice seeds from China

Vietnam relies on imported rice seeds from China

Potato late blight occurs seriously in Gansu and Inner Mongolia

Potato late blight occurs seriously in Gansu and Inner Mongolia

Corn hybrid "Weike 702" appraised by corn experts

Corn hybrid "Weike 702" appraised by corn experts

Chinese Vegetable Association founded to enhance vegetable industry

Chinese Vegetable Association founded to enhance vegetable industry

Cotton output in Xinjiang would rise in 2012

Cotton output in Xinjiang would rise in 2012

Heilongjiang Kenfeng sets up breeding center with research academy

Heilongjiang Kenfeng sets up breeding center with research academy

48 seed companies would obtain production and operation license form MOA

48 seed companies would obtain production and operation license form MOA

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