Making the Most of the Middle East and African Seed Markets
The seed and crop production market in Africa and the Middle East is relatively small compared to the global market, writes AgbioInvestor’s Allister Phillips in a recent issue of AgriBusiness Global DIRECT. In 2021, the region accounted for only 5% of the global traded seed value due to low rates of cultivation of commercially traded seed. However, the vegetable sector is the most valuable in the region, making up more than half of the traded seed value. This is because vegetables are often grown for export to foreign markets, such as Europe.
High-value vegetables produced from F1 hybrids, which result in predictable and uniform produce, command higher prices compared to non-hybrid varieties. The leading markets for traded seed in the region are Turkey, Egypt, Iran, Israel, Algeria, and Morocco, with the majority of the value coming from vegetable seeds. When vegetables are excluded, the most valuable crop after vegetables in each country is maize in South Africa, sunflower in Turkey, rice in Egypt and Tanzania, and rice in Nigeria.
There is potential for value development in the region through increased utilization of commercially sold varieties and the adoption of genetically modified (GM) crops. Currently, South Africa is the main driver of GM cultivation in the region, with more than 90% of the GM planted area. Other countries in the region, such as Sudan, Ethiopia, Kenya, and Nigeria, have also started cultivating GM crops in recent years.
In South Africa, GM maize is the most widely cultivated crop, with adoption rates exceeding 90% since 2019. GM soybean and cotton are also grown in the country. The value of the South African GM seed market was $270 million in 2017, with maize accounting for the majority of this value. As adoption rates are already high, future value growth in these crop sectors will come from the transition to higher-priced stacked gene varieties or the commercialization of new input or output trait technology.
Sudan has seen high adoption rates of GM cotton, reaching 98% of the country’s total cotton area. Ethiopia and Kenya have also started cultivating GM cotton, but the adoption rates are still relatively low. Nigeria is in the trial phase for GM cotton and cowpea.
Overall, the Africa and Middle East region is approaching the limit of the value derived from its GM seed area. Value growth can be achieved through increasing adoption rates, transitioning to hybrid GM varieties, cultivating stacked gene crops, and utilizing output traits. Additionally, as more countries in the region recognize the potential cost savings and ease of cultivation offered by GM technology, the spread of the technology to other countries is likely to contribute to the growth of the GM seed sector in the region.
Read more about AgbioInvestor’s expectations for the region’s seed outlook in AgriBusiness Global DIRECT.