The research study covers the present scenario and growth prospects of the global GM seeds market for 2016-2020. In order to calculate market size, the report considers revenue generated through the sale of corn seeds, soybean seeds, cotton seeds, canola seeds, and other seeds to farmers of GM crops. Forecasting is based on the projected demand for GM seeds worldwide and average unit price estimations during the forecast period. The base year considered is 2015.
A major share of the GM seeds sown across the world is owned by Monsanto, the largest seed company in the world. Bayer CropScience, DowDuPont, Groupe Limagrain, Monsanto, and Syngenta (known as the ‘big five’) collectively control about 70% of the global GM seeds market.
On average, the adoption of GM technology in agricultural practices has increased crop yields by 22%, reduced use of chemical pesticides by 37%, and increased farmer profits by 68%.
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Technavio analysts highlight the following four factors that are contributing to the growth of the global GM seeds market:
- Rise in adoption of biofuels
- Increased demand for animal feed
- Threat from global food companies to non-GM food products
- Premium pricing of non-GM food products
Rise in adoption of biofuels
Nowadays, consumers are more concerned about the environment, which is driving the demand for biofuels. Biofuels are made up of energy crops such as wheat, soybean, sugarcane, and corn. They provide sustainability for the environment, reduce the global consumption of fossil fuels, and limit pollution.
Governments of different countries in APAC and Africa are also trying to reduce the use of conventional fuels and encourage the use of biofuels. Also, farmers in these regions have increased the use of biofuel crops for maximum yields. Therefore, the increasing production of bio-crop fuel due to the rising demand for biofuels is boosting the global GM seeds market. Brazil's production of renewable diesel fuel increased from 6% in 2014 to 7% in November 2015. Moreover, the country increased its biodiesel mandate from 7% in 2015 to 8% from March 2016. The Bulgarian Renewable Energy Act (REA) has set a national target of 16% for renewable energy in the total energy consumption and 10% in transportation fuel consumption by 2020.
The International Energy Agency (IEA) expects an increase of 1% in the share of cropland for biofuels in the forecast period. Since the demand and production of biofuels has increased, it is anticipated that there will be a rise in the demand for GM seeds which are required for the production of these biofuels.
Increased demand for animal feed
According to Mantri Charan Kumar, a lead analyst at Technavio for agricultural equipment research, “Animal feed accounts for a huge share of the world’s total harvest, ranging from one-third to nearly half. The GM seeds market is also growing because of the rising demand from the livestock sector where some crops are used as animal feeds. The livestock sector uses corn grain and soybean meal as a source of energy and protein in both monogastric and ruminant diets.”
Every year, nearly 75 million tons of GM corns and 71 million tons of GM soybean are fed to livestock worldwide. Other important animal feeds include canola, cotton, rice, papaya, wheat, and sugar beet. Different additives and enzymes can be added to animal feed that is produced with the help of GM seeds.
Threat from global food companies to non-GM food products
Many International food companies such as promoting the use of GM food products. Large food companies have invested millions of dollars to prevent mandatory food labeling campaigns for GM food products in the US. These food companies have provided money either directly or through trade organizations like the Grocery Manufacturers Association (GMA) against such campaigns and have pumped USD 17 million in order to defeat the labeling campaign. In addition, companies like Monsanto and Kraft Foods have donated approximately USD 46 million to the cause against labeling.
Although North America was the second largest market for non-GM food products, campaigns preventing the disclosure of GM products being used are hindering the growth of the non-GM food market. This is subsequently contributing to the growth of the GM seeds market.
Furthermore, only around 60 countries across the globe have adopted labeling by mentioning that certain GM ingredients are present in food products, whereas 130 countries do not have any labeling regulations. Therefore, the threat from some of the global food companies will result in decline in the sale of non-GM food products, which will affect benefit the global GM seeds market by acting as one of the major drivers in the present scenario.
Premium pricing of non-GM food products
Premium pricing of non-GM food products is one of the major growth drivers for the global GM seeds market. Although the population today is more health-conscious, the purchasing decision of non-GM foods is often based on price. It is estimated that more than 68% of all primary grocery shoppers are not willing to pay a higher price for non-GM foods, whereas only 11% were willing to pay more. Over half of the consumers in the US have concerns about GM food products, but they are not sure about the health effects. “It is expected that with the continuous increase in the pricing of non-GM food products, consumers will switch to GM food products. This is because the pricing is reasonable, and the health effects are unclear to most consumers,” says Mantri.
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