USDA: China plants 12 million tons of seed in 2022

GENERAL SITUATION

China is the second largest seed market in the world, behind the United States and annually plants 12 million metric tons (MMT) of seed, with a market value of U.S. $19 billion. The seed usage of seven key crops (corn, rice, wheat, soybean, cotton, potato, and rapeseed) is approximately 10 MMT, with a market value of U.S. $13.5 billion. Commercial seed accounts for an average of 70 percent of China’s seed for major crops above with the remainder farmsaved seed from the previous harvest. The market share of commercial seed varies by commodity with a high of 88 percent for cotton to a low of 40 percent for seed potatoes. According to official China’s reports, the country is self-sufficient in rice and wheat seed and nearly self-sufficient in corn and soybean seed. While domestic vegetable varieties continue to improve, they still do not meet the diversified needs of the market and China imports 15 percent of all vegetable seed, according to the 'China: Planting Seed 2023 Annual' report, published by USDA FAS.

According to the 2022 Crop Seed Industry Development Report in China (hereafter referred as 2022 Seed Report) by the Ministry of Agriculture and Rural Affairs (MARA), different trends in seed usage have emerged. Seed corn usage slowed down, from 28.65 kilograms per hectare (kg/ha) in 2017 to 26.5 kg/ha in 2021, mainly due to the increased popularity of precision planting technology; while hybrid rice seed increased from the 16.8 kg/ha in 2017 to 18.2 kg/ha in 2021, mainly due to increased use of mechanized rice planting area. Wheat seed increased from 187.4 kg/ha in 2017 to 214 kg/ha in 2021, mainly due to increased seeding density.

In recent years, MARA has adopted measures to improve variety registration management and strengthen intellectual property protection as a push to diversify the varieties registered as many current registrations are for similar varieties of the same crop. In 2022, the number of nationally registered varieties decreased after years of an upward trend (see figure 1 below). MARA reported that only 26 percent of rice varieties submitted for registration were approved while approval of corn varieties were only 23 percent, a drop of 15 and 38 percentage points respectively from the previous year.

According to the MARA’s 2022 Seed Report, by the end of 2021, there were 7,668 seed companies holding valid business licenses. Among them, the number of companies with corn seed business was 1,920; rice seed 1,182; wheat seed 1356; soybean seed 506; cotton seed 202; rapeseed 519; seed potato 430; peanut seed 312; melon seed 2,638. (Note: The total number exceeds 7,668 because some companies produce multiple seeds at the same time, such as both corn seeds and soybean seeds).

Figure 1. China: National Variety Registration Data (2019-2022)

SEED MARKET

Note: The marketing year for all seeds of all crops runs October-September.

In March 2023, the National Agro-Tech Extension and Service Center of MARA released major crop seed supply and demand data in 2023 at the19th National Seed Information Exchange and Commodity Trading Fair. Major information as below:

Corn

China’s hybrid corn seed production is estimated at 1,360,000 metric tons (MT) in MY2022/23 (October-September), 31 percent increase from MY2021/22 because of expanded corn seed planting area. MARA statistics show hybrid corn seed area increased 35 percent to 244,000 ha in MY2022/23, record high in last six years. The significant increase is mainly because of the low corn seed stocks. Please see 2021 Plant Seeds Annual Report for more analysis on increased corn seed area. Due to weather-related reductions in major producing areas in Northwest and Southwest China, the national average yield of hybrid corn seed is 5,580 kg/ha in 2022, which is at the median level in the past five years. Gansu province continues to be largest corn seed producers in China, accounting for about 48 percent of total corn seed area in MY2022/23.

China’s total corn seed supply in MY2022/23 is estimated at 1.65 MMT, including 290,000 MT of carry-in stocks. MARA estimates MY2022/23 hybrid corn seed usage at 1.15 MMT, causing stocks to increase to 500,000 MT. In terms of price, the national average sales price of see corn is expected to be RMB35.4/kg (US$2.35/lb.), an increase of 14 percent over the same period last year. However, industry sources estimate prices will increase much higher, mainly because of a 20 percent rise in production costs from the previous year.

Rice

Hybrid rice seed production is estimated at 280,000 MT in MY2022/23, a five percent increase from MY2021/22 due to larger planting area. MARA statistics show hybrid rice seed area increased 25 percent to 131,000 ha in MY2022/23. Among the 131,000 ha, 16,100 ha is early rice, 84,000 ha is middle rice, and 31,000 ha is late rice. The average yield of hybrid rice seed in MY2022/23 is 2,160 kg/ha, about a 22 percent decrease from the previous year due to poor weather conditions.

Total hybrid rice seed supply in MY2022/23 is estimated at 330,000 MT, and total hybrid rice seed demand (domestic use and exports) in MY2022/23 is estimated at 270,000 MT, a 15 percent increase from MY2021/22 due to higher average seed usage and bigger hybrid rice area. In terms of price, the national average sales price of hybrid rice seeds is estimated at RMB 78.44/kg ($5.20/lb.), an increase of four percent over the same period last year.

Conventional rice seed production is estimated at 1.18 MMT in MY2022/23, a 24 percent increase from MY2021/22. MARA estimates MY2021/22 conventional rice seed demand at 602,000 MT, a five percent decrease from MY2021/22 as the result of larger hybrid rice planting. In terms of price, the national average sales price of conventional rice seeds is expected at RMB 10.62/kg ($0.70/lb.), an increase of four percent over the same period last year.

Soybean

Soybean seed production is estimated at 880,000 MT in MY2022/23, a 17 percent increase from My2021/22. China’s soybean seed supply is sufficient to meet domestic needs.

TRADE

Imports

China’s seed imports are forecast 25 percent lower in MY2022/23 from MY2021/22 due to lower grass seed imports which account for nearly 80 percent of China’s total seed imports in volume (see grass seed import section below). China imports relatively little seeds for major grain crops such as corn, wheat, rice, and soybean due to market access limitations for these key crops and owing, in part, to the China’s self-sufficiency goals in grains. Vegetable and grass seed are the top two imported seeds, accounting for 78 percent and 80 percent of volume and value respectively in China’s MY2021/22 total seed imports. The United States continues to be the largest seed supplier to China, accounting for 28 percent by value of China’s MY2020/21 planting seeds imports, followed by Chile (11 percent), Denmark (10 percent), Thailand (six percent), and Japan (five percent). See figure 2 below.

Figure 2. China: Seed Imports from Major Suppliers

Table 1. China: Planting Seed Imports from the World

China imposed additional retaliatory tariffs on planting seeds on September 1, 2019. However, the tariff does not apply to grass (rye, Kentucky, fescue, oat, and clover) or vegetable seed, which combined account for 85 percent of China’s total seed imports from the United States in value in MY2021/22. Please see Annex I for tariff schedule on U.S. planting seeds.

Table 2. China: Planting Seed Imports from the United States

Vegetable Seed Imports

China’s MY2022/23 vegetable seed imports are forecast at 11,500 MT, about 10 percent increase from MY2021/22 driven by increased demand for high-end and specialty vegetable seeds in China. In addition, according to industry statistics, China's vegetable area has maintained a growth rate of 1.5-2 percent the last three years, and the trend is expected to continue to meet China’s increasing demand for vegetables.

MARA data estimates China’s annual vegetable seed usage in China at 100,000 tons with imports varying from 9,000-10,500 tons over the last five years, accounting for about 10 percent of the total vegetable seed usage.

Chinese vegetable seed companies are increasingly producing seed overseas, particularly in South America to take advantage of the similar climate and reverse seasons, and then re-export the seed to China. China’s primary imported vegetable seeds are tomato, broccoli, carrot, onion, and spinach.

Italy, Thailand, Indonesia, and Denmark supplied 90 percent of China’s vegetable seed imports in MY2021/22 by volume. Though the United States accounted for less than 1 percent of China’s vegetable seed import volume it accounted for 12 percent by value due to the high unit price, falling behind Chile which accounted for two percent by volume as well but 23 percent of the value. The price of imported vegetable seed in MY2021/22 from the United States was US$173,984 per ton compared to US$314,022 from Chile while the average price from all importers to China was US$26,690 per ton according to China Customs data.

Exports

China’s MY2022/23 seed exports are forecast at 30,000 MT, about 10 percent decline from MY2021/22 due to lower rice seed exports, which accounts for over 70 percent of China’s total seed exports in volume. Rice seed accounted for 76 percent of China’s total seed exports in MY2021/22 by volume, but only 34 percent by value. Meanwhile, vegetable seed accounted for 12 percent of total seed exports by volume in MY2021/22, while it accounted for 46 percent by value.

China’s MY2022/23 hybrid rice seed exports are forecast at 22,000 MT, about 12 percent decrease from MY2021/22. According to industry sources, traditional rice seed importing countries may reduce their imports with increasing locally produced rice seed supply because of Chinese rice seed companies and multinational seed companies investment in their countries. Pakistan, the Philippines, and Vietnam are the largest buyers of Chinese rice seed, which combined account for 97 percent of China’s total rice seed exports in MY2021/22.

China’s MY 2022/23 vegetable seed exports are forecast at 3,900 MT, stable from the previous year. According to industry sources, most of the exported vegetable seeds are contracted by foreign enterprises (foreign companies entrust Chinese producers to produce designated seeds and then export to them), these mainly include tomato, lettuce, beans, and cabbage seeds.

Major exported vegetable seeds include tomato, lettuce, beans, and cabbage. Vietnam, Netherlands, Italy, South Korea, and the United States are the largest buyers of China’s exported vegetable seeds, accounting for about 55 percent of China’s vegetable seed exports in MY2021/22.

Table 3. China: Seed Exports to the World

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