Summary

The seed market in South Africa is estimated to register a CAGR of 5.2% during the forecast period(2020-2025). Increasing consumption of fruits and vegetables to meet the nutrient requirement along with increasing population necessitating higher productivity. Non-profit organizations and many regional regulatory bodies promoting vegetable breeding, and an increase in food demand are other factors driving the growth of the seed market. The seeds industry in South Africa is quite mature and serves commercial farmers with over 100 seed companies being a part of SANSOR, the regulatory body for seed certification in South Africa. Furthermore, the Agriculture, Forestry, and Fisheries department of South Africa planned in 2016 to increase financial support to emerging producers by USD 28.4 million over the medium term, which will be accessed through the Land and Agricultural Development Bank of South Africa. All these factors together are driving the seeds market in the country. Some of the leading companies are Capstone Seeds, Corteva Agriscience, Syngenta Seed S.A. (Pty.) Ltd, Sakata Seed Southern Africa (Pty) Ltd., Rijk Zwaan Zaadteelt en Zaadhandel B.V., and Bayer (Pty) Ltd, South Africa.

Key Market Trends

Need for Meeting the Nutritional Security

The growing health consciousness among South African consumers has resulted in consumers spending more on healthier foods such as vegetables. The agencies like The New Partnership for Africa’s Development (NEPAD) Agency, along with various international, local, and government associations, are supporting the South Africa nutritional security programs. This is thus driving the production of fruits and vegetables in the country. For instance, according to the Food and Agricultural Organization (FAO), in 2016 the vegetable production was 2580.98 thousand metric tons that have increased to 2694.29 thousand metric tons in 2017. Also, fruit production in the country increased from 6565.22 thousand metric tons to 6893.87 thousand metric tons during the same period. Thus the rising production will create demand for quality seeds to increase the productivity to meet the consumption demand.

Demand for Quality Seeds

The increase in the population level of the country has fueled the demand for higher productivity. With the growing population and shrinking plots of cultivable land, the demand for quality seeds is increasing. COMESA (Common Market for Eastern and Southern Africa) reports that just 23% of the smallholders have access to certified seeds, which indicates huge scope for the quality seeds.

According to ISF the South Africa seeds export valued USD 120 million in 2017 against USD 110 million in 2016, which indicates the growing seed market. Crop yields in Africa are the lowest in the world, due to limited access to quality inputs especially improved seed varieties suitable for the different climatic conditions and soils.

According to FAO, in 2016 yield of cereals was 38,176 hg/ha which increased significantly to 56440 hg/ha in 2017 and shown a decline in yield which was 49335hg/ha in 2018. This fluctuation in yield can be overcome by using quality seeds that ensure good germination and protection against adverse conditions. This indicates the growth of the market for seeds in the country.

Competitive Landscape

The South Africa seed sector is slightly fragmented. Companies are highly focused on the introduction of new varieties of seeds. Some of the other strategies followed are mergers and acquisitions, expansion, and research to outstand the competition. Some of the leading companies are Capstone Seeds, Corteva Agriscience, Syngenta Seed S.A. (Pty.) Ltd, Sakata Seed Southern Africa (Pty) Ltd., Rijk Zwaan Zaadteelt en Zaadhandel B.V., and Bayer (Pty) Ltd, South Africa.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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