Market Potential and Future Trends in Seed Treatment Industry: New Study

Seed treatment is defined as the application of chemical or biological solutions to seeds, either to control pathogen or pest attacks or to enhance seed viability during the germination phase through physical, chemical, or biological treatments. By function, the seed treatment market has been broadly classified into seed protection treatment and seed enhancement treatment segments.

The seed treatment market is a small sector of the global agrochemical industry. However, the market has been growing at a significant rate due to the increasing need for a sustainable approach in agricultural operations in developed countries. Strong research funding by key manufacturers for product developments, such as compatible combinations of biological and chemical components, is expected to drive the growth of the market over the next five years.

According to MarketsandMarkets, the Seed Treatment Market is expected to grow from USD 6.1 billion in 2022 to USD 9.2 billion by 2027; it is expected to grow at a CAGR of 8.3 % during the forecast period.

Source: MarketsandMarkets

Chemical seed treatment to account for the largest share of the Market

Chemical seed treatment accounted for the largest share of about 80% of the seed treatment market in 2021 and are expected to maintain their position during the forecast period. Chemical seed treatment is the application of chemical pesticides, such as fungicides or insecticides, or a combination of both, which, when applied on seeds, prevent any seed-borne or soil-borne pathogenic diseases. It is also used to control insect pests on the field. Chemical seed treatment protects seeds against seed rots and other diseases during storage, as well as after planting. It serves the purpose of seed disinfection, as well as disinfestation and protection based on the features and purpose of the treatment.

Source: MarketsandMarkets

Challenge: Unorganized new entrants with a low profile-to-cost ratio

New technologies, such as breeding methods, are creating growth opportunities for new entrants in the market, some of which are disrupting the market growth for the leading players. New entrants in the market do not have brand recognition, but the seed prices of these small players are very low as compared to those of the established players, which affects the market share of the major market players. The easy availability of raw materials for seed products is a key aspect for domestic players. However, domestic players focus on finding distributors and adding a layer to the value chain, which either reduces the profit margins or increases the product cost. The competition with the domestic players and the availability of new cheaper technologies for breeding are the key factors projected to pose challenges for the leading players in the seeds market. Low brand loyalty is also one of the key factors inhibiting the growth of the seeds market, which is seed coated with innovative technologies, globally.

Restraint: Limited shelf-life on treated seeds

Seed treatments can protect the seed and seedlings from low-moderate attacks by insects during the emergence and establishment of plants. Although the duration of protection may be limited, a delay in crop damage and pest establishment can be lowered. Due to the limited shelf life of treated seeds, seed germination and vigor decline relatively increase, particularly in seeds such as soybean.

In microbial inoculant seed treatments, key factors such as incorrect inoculant formulation or limited shelf-life can discourage a wider use of seed coating solutions. Formulations have a significant impact on the survival of microbial during the process of product elaboration, storage, and application. The survival of the microbes is affected by the physical and chemical properties of its formulation. Maintaining the viability of the coated microbes in seeds can be challenging, therefore, shortening their shelf life.

Source: MarketsandMarkets

Liquid formulations are used by a majority of farmers across the globe due to various factors, such as ease of handling and better seed coverage. Hence, the market for the liquid formulations segment is expected to dominate the market during the forecast period.

Source: MarketsandMarkets

The seed treatment market, by application technique, is estimated to be dominated by the seed coating segment in 2022. The seed coating technique is used for the treatment of bulk seed quantities at effectively lower costs.

On the other hand, owing to the increasing development of seed dressing products, the seed dressing technique is highly preferred as a suitable application technique in developed countries across the globe. Though this technique allows a uniform pesticide application to some extent, newer and better technologies supporting controlled-release technology can be developed for the benefit of the global agricultural industry.

Seed Coating and Seed Dressing are Major Application Techniques for Seed Treatment

 
Seed Coating: - The seed coating method includes a specific binding agent used with a formulation to enhance adherence to the seed. The method permits the chemical to be applied to a synthetic polymer, which is sprayed on seeds in a solid, thin coat. Constant technological advancements are being witnessed in the market, wherein film and polymer coatings are used to allow the imbibition of water and, consequently, the germination process. There is also a possibility to add different substances to enhance the shape of seeds and ease the sowing of seeds. In addition, additives such as nutrients are used to improve plant health.

Seed Dressing: - Seed dressing is carried out by coating cereal seeds with fungicides, where the seeds to be treated are piled onto a solid surface, which is then dusted with a fungicide. In villages, it is then hand-mixed using a shovel until the grain appears to be evenly coated. This is considered a crude method to treat seeds, as it leads to an uneven spread of chemicals.

Seed Pelleting: - The major advantage of seed pelleting is the absence of seed contact with phytotoxic chemicals. It is, hence, a preferred alternative for seed coating and seed dressing techniques. However, the high cost of application is a key factor encouraging the adoption of pelleted seeds. The addition of nutrients or additives, such as activated charcoal and seed encapsulation technologies, are a few recent advancements observed in the seed pelleting market that can assist in the natural seed germination process.

Driver: Seed coating witnesses high demand for commercial applications

 
Farmers are becoming more aware of the innovative agricultural methods and are shifting from traditional farming methods to gain higher yields and profits from limited resource availability. They are increasingly investing in commercial seeds, which is identified as one of the major trends in the industry. Most high-value crops, such as ornamental plants, vegetables, and fruits, are grown through greenhouse cultivation. Seeds extremely small, such as that of lettuce, tomato, and carrot, are impossible to plant with proper spacing. Hence, techniques such as seed pelleting make sowing and growing the required plants easier. Pellets provided in the market are produced in even size, making them heavier than others. This is desired for commercial operations, enabling the seeds to fall accurately where it is dropped. Many companies, such as Globachem (Belgium) and DSM-Amulix (Netherlands), offer pelleted seeds that cater to both conventional and organic seeds of field crops and vegetable seeds. Over the years, extensive agricultural research led to improvements in the preparation of pellets and the substances used to coat seeds. Farmers reap many benefits by using pelleted seeds, including oxygen availability, accurate spacing, reduced need for thinning, and generating less waste from the purchase of unneeded seeds.

Emerging Trends in Seed treatment market

Technology innovation: - Technological changes coupled with agronomic and societal changes are reshaping the seed treatment industry and the future outlook in the next five years for the value chain stakeholders, including formulators, manufacturers, trading houses, distributors, retailers, and import/ export companies. Technologies such as advanced imagery, artificial intelligence, and sensor technology will drive the decisions of farmers that result in optimized variable rate application of seed treatment products.

Consumer demand: - Consumer demand for sustainable sourcing forces food processors and brokers to monitor and direct production standards. Demand for GMO-free, organic, and products from other perceptive markets will ebb the demand for inorganic agriculture products. The direct-to-consumer purchasing programs will alter the traditional distribution channels. Multinational companies and retailers in the crop protection industry are already creating outcome-based purchasing models that ensure crop yields move away from the price points and towards the collaborative digital agronomy system that maximizes technology investments.

COVID-19 Impact on Seed Treatment

With the outbreak of COVID-19, most farmers started panic buying, because of which the sales grew 30- 35% more in 2020 compared to last year. Most multinational companies, such as Syngenta AG (Switzerland) and Bayer AG (Germany), had stock-piled the chemicals. Therefore, there was no shortage in the supply. There has been no severe impact on the agriculture industry, as agricultural activities have increased with food consumption. Although the restaurants have shut down, consumption of home-cooked foods has increased, which has led to increased agricultural operations. In the initial days, there was minimal impact on the movement of agrochemicals. However, the transport barriers were removed by government bodies later, which made it easy to meet the demand of farmers. Therefore, major companies have made profits in double digits in the first quarter of 2020. Key companies like Bayer AG (Germany), BASF (Germany), Corteva Agriscience (US), and Syngenta AG (Switzerland) have resumed their production operations even during the supply chain disruptions and ensured the smooth supply of their products to dealers and distributors.

Future Outlook

With the extensive use of polymer-based synthetic coatings derived from fossil polymers on seeds, there has been an increase in environmental impact that has drawn the attention of the seed enhancement companies to produce sustainable solutions. Hence, biodegradable seed coatings are projected to account for a major market share in the coming years. This is due to the increase in awareness about healthy food consumption by consumers and the adverse effects of non-biodegradable seed coatings on the environment. Moreover, industrial applications of biodegradable seed coatings, such as agriculture, food & beverage, and medicine, increase the demand for biodegradable seed coatings in the market. In 2018, Koninklijke DSM N.V. (Netherlands) and Amulix, a subsidiary company of Dynaplak Group (Netherlands), came together to develop high-performing bio-based seed coating solutions for agriculture under the brand name, Amulix.

The usage of microplastic particles poses a serious risk to the environment and human health. Therefore, the European Chemical Agency (ECHA) has restricted the use of oxo-plastics or microplastic particles that are added to consumer or commercial products. In order to mitigate environmental pollution, the demand for biodegradable seed treatment solutions remains high in the market.

If you want to know more information, please contact Neha Singh at neha.s@marketsandmarkets.com or call her: +91-9511625630

This article was initially published in AgroPages' '2022 Seed Treatment Special' magazine.