China is the second largest seed productioncountry in the world, showing great vitality and potential in world's seed mareket. CAGR of market value in domestic seed market reaches 16.69% from 2001 to 2009. However, such a large seed market is currently in turmoil, with too many companies but weak R&D capability, and great challanges have to be faced from many overseas seed companies.
In a bid to consolidate current chaotic market of domestic seed industry, the Ministry of Agriculture is now formulating the new policy of "Seed management regulations". With the upraised threshold for this industry after implementation of the new policy, the number of seed companies in China is expected to witness reduction in the future since lots of seed companies can not meet these requirements.
Some insiders from small companies expressed their discontentment for the new policy, because they might be eliminated or acquired by other big companies due to the rising threshold. However, the leading seed companies in domestic market, such as the listed companies, may benefit much from the policy. Actually, some companies, such as GNSGC and Winall Hi-tech, already have taken the M&A strategy to seek further development. They invested in several companies in the past few months.
Meanwhile, overseas seed companies continue to strengthen their business in China, such as expanding vegetable seed business in Guangdong, cooperating with domestic companies, etc.