Corn seed prices diverge sharply, with dominant varieties seeing notable increases
At present, spring corn planting in Northeast China is nearly finished, and summer-sown corn in the Huang-Huai-Hai region has also begun. This year's steady increase in corn planting area has driven a substantial rise in corn seed usage. Data show that corn seed prices have risen significantly this year, with an increase of 20%-30%, and price divergence among different varieties is relatively severe.
According to Shanghai Securities News Information, because varieties such as soybean and sorghum are affected by imports, the profitability of planting corn has an overwhelming advantage, and the trend of converting traditional Northeast soybean-producing areas to corn cultivation continues. In the North China Huang-Huai-Hai region, because corn sowing and harvesting have basically achieved mechanized operation in recent years, farmers almost all choose to plant corn after wheat harvest. At the same time, supported by the temporary storage policy, corn prices have maintained a stable operating trend this year, and farmers' planting returns are relatively considerable.
Therefore, in the absence of extreme weather, the increase in corn planting area this year has driven a substantial increase in corn seed usage. At the same time, some seed production enterprises were forced to convert a batch of seeds to commercial use, digesting part of the inventory. After three years of high inventory pressure, the corn seed industry's two-year inventory increase will be curbed, and the corn seed industry is expected to enter an upward prosperity channel.
From the 2015 China Corn Network spring sowing series investigation reports, it can be seen that conditions reflected at various survey points all point to an increase in planting area, and corn seed prices have risen significantly, with price divergence among different varieties relatively severe. The market situation is still "high quality, high price," and varieties that performed outstandingly last year have firm prices this year, among which a small number of exclusive varieties have seen relatively large increases. For example, the Demeiya series produced by Kenfeng Seed Industry has seen a notable price increase; 30 jin/bag, a 50,000-seed bag of Demeiya series seeds sells for 1,500 yuan. For the brand variety Xianyu 335, which is exclusively marketed, the price set each year is basically stable. Despite three consecutive years of inventory pressure in the seed market, Xianyu 335 still maintains a high seed price.
On the contrary, for varieties that have already entered a decline phase, planting area and prices have declined year after year. The most typical example is Zhengdan 958 and Jundan 20. Zhengdan 958 was the best-performing variety in China's corn seed market over the previous decade. But at present, its national promotion area and price are continuously declining. Last year, the price per bag of seed dropped from the originally set price of 40 yuan-50 yuan per bag to 25 yuan or even 20 yuan.
Therefore, high inventory is mainly concentrated in seeds with a high degree of homogenization. For non-exclusive varieties such as Zhengdan 958, market prices have generally fallen, entering a period of inventory digestion. For enterprises with exclusive research and development and exclusive variety rights, the impact of inventory is relatively limited. In the 2014/2015 sales season, the industry will further diverge. As leading enterprises with dominant varieties and complete channels, Denghai Seed Industry, Longping High-Tech, and others will not only be limitedly affected by industry inventory pressure, but will also become the biggest beneficiaries of this round of industry reshuffling.
Driven by policies such as the new Seed Law and the green channel for variety approval, leading seed industry enterprises' dominant varieties are expected to see simultaneous rises in volume and price.