GM Seed Market Situation and Potential in Africa and Middle East
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• SPECIAL REPORT • |
By Allister Phillips
Contributor
This article will describe the value of traded seed and crop production in Africa and the Middle East, with a focus on the leading markets in the region, examining the current market situation.
Africa and Middle East Seed Market Overview
Despite a large arable area, the Africa and Middle East region represented just 5% of the global traded seed value in 2021, owing to the relatively low rates of cultivation of commercially traded seed. Vegetables are by far the most valuable seed sector in the region, forming more than half of the regions traded seed value. A key reason for this is that vegetables in these countries are often cultivated for export into foreign markets such as Europe. High value vegetables produced from F1 hybrids, which results in predictable and uniform produce, and due to the breeding requirements, seeds are sold at a higher price and non-hybrid varieties.
The table below shows the leading traded seed country markets ranked by value. The table also shows the proportion of total value derived from vegetable seeds. It is clear to see the importance in value terms of vegetables, with the bulk of value coming from the crop in Turkey, Egypt, Iran, Israel, Algeria, and Morocco.
When vegetables are excluded, the most valuable traded seed country markets, and their most value crop after vegetables, are South Africa (maize), Turkey (sunflower), Egypt (rice), Tanzania (rice), and Nigeria (rice).
There is potential value development for the region as a whole, through increased utilization of commercially sold varieties, as well as adoption of varieties possessing genetically modified (GM) traits. The rest of this article will discuss the current situation of GM crops in Africa and the Middle East as well as the real term (excluding inflation and exchange rates to focus on volume) value potential of GM crops once adoption maturity has been reached. The analysis will keep current total planted, GM seed prices, and GM product portfolio static, while increasing GM adoption rates to expected mature levels.
GM planted areas and adoption rates are sourced from AgbioInvestor’s free to access service, GM Monitor https://gm.agbioinvestor.com/.
Africa and Middle East GM Seed Market
Africa and the Middle East planted 3.4 million hectares of GM crops in 2022, including farmer saved and government supplied seed, a rise of 8.4% over the previous year. South Africa is the driver of the region’s GM cultivation as it represents more than 90% of the GM planted area. From 2008 to 2015, Burkina Faso cultivated GM cotton, however, plantings ended as it was reported that the varieties containing GM traits were not yielding enough. Since 2012, other countries in the region have begun GM crop cultivation and Africa now represents a region of GM cultivation potential.
South Africa
Area in 2022: 3.195 Ha m. (+8.8%)
GM Crops (year of introduction): Cotton (1997), Maize (1999
South Africa possesses the world’s seventh largest GM crop area at 3.2 million hectares in 2022. Within this, maize forms the bulk of the country’s GM area, 72% of South Africa’s total.
GM maize was first planted in 1999 on an initial 0.1% of the country’s total maize area. It was not until 2019 that adoption rates exceeded 90%, but since that time percent utilization has marginally declined to 87.7% in 2022. 65.8% of the country’s total maize area is planted with stacked gene varieties, with solely herbicide tolerant varieties forming the next largest group with 15.8% of the total area. Conventional varieties that do not possess any GM traits represent approximately 12.3% of the total area, while solely insect resistant varieties are planted on roughly 6.1% of the country’s total maize area.
GM soybean was first cultivated in South Africa in 2001. In the 20 years since commercialization, GM plantings now represent 95% of the country’s total soybean area. In 2022, almost 0.9 million hectares of GM soybean was cultivated, a rise of 11.8% over the previous year. The GM area is exclusively planted with Roundup Ready (glyphosate tolerant) varieties.
GM cotton was planted on a small area in South Africa at 0.02 million hectares in 2022, an increase of 1.1% over the previous year. GM Cotton was introduced in 1997 when solely insect resistant varieties were utilized, however in 2022 stacked gene varieties formed the majority of the total cotton area at approximately 90%.
The value of the South African GM seed market was $270 million in 2017, with maize forming 83.1% of this figure. As shown in the adoption rate chart above, South Africa GM utilization is effectively mature as all crops are close to 90% or above. As a result, any future development of the value of these crop sectors will come from portfolio transition to higher price stacked gene varieties or the commercialization of new input or output trait technology.
Sudan
Area in 2022: 0.216 Ha m. (0.0%)
GM Crops (year of introduction): Cotton (2012)
Sudan has only cultivated GM cotton for the past 10 years. During which adoption rates have increased to reach 98.0% of the country’s total cotton area. During the first year of commercialization, percent utilization was 13.3%, however, this quickly jumped to 98% within four years.
The Sudan GM cotton area is planted with solely insect resistant varieties, typically containing Bayer’s Bollgard trait.
The value of Sudan’s GM cotton seed sector was $10.3 million in 2021. However, as the GM adoption chart above shows, Sudanese growers were quick to utilize the technology following its commercialization, with effectively all of the country’s cotton area under GM varieties. For the country’s GM cotton seed market to increase in value, new technology needs to be commercialized.
Ethiopia
Area in 2022: 0.0089 Ha m. (+25.4%)
GM Crops (year of introduction): Cotton (2012)
Ethiopia has only recently begun the cultivation of GM cotton, with first plantings occurring in 2019. Despite the large percentage increase in 2022, GM plantings were only 8,900 hectares, representing 10.9% of the country’s total cotton area. The Ethiopian government authorized the use of seeds sourced from India, typically JK Agri Genetics, however, since that time there has reportedly been greater use of seeds purchased from uncertified sources on the Ethiopian border.
In a similar situation to Sudan, Ethiopia’s GM cotton area is planted with solely insect resistant varieties.
In 2021, the value of Ethiopia’s GM cotton seed market was $0.13 million due to the low area planted with GM varieties. If it is assumed that the country was able to achieve a mature adoption rate of 98%, meaning 98% of the country total cotton area was planted with GM varieties, the value of the country’s GM cotton seed sector would increase to $3.8 million. This rise in value not only transitions area from conventional seed to GM seed, but also includes the transition of non-traded seed to sales of commercial seed.
Kenya
Area in 2022: 0.004 Ha m. (+663.6%)
GM Crops (year of introduction): Cotton (2020)
Kenya planted its first commercial varieties of GM cotton in 2020. In the two years since, plantings have increased to 4,000 hectares, representing 21.3% of Kenya’s total cotton area in 2022. Kenya’s government has signaled that it plans to increase the level of cultivation to more than 16,000 hectares by 2024.
In 2021, the value of the Kenyan GM cotton seed sector was $0.03 million as a result of the low area the technology was deployed on. If the country saw a utilization rate of 98%, the value would increase to reach $0.88 million. This rise in value not only transitions area from conventional seed to GM seed, but also includes the transition of non-traded seed to sales of commercial seed.
Nigeria
Nigeria has begun the cultivation of GM cotton and cowpea. However, GM cotton is still reportedly in its trial phase, while GM cowpea began commercial plantings in 2022. Data from Nigeria is presently difficult to attain and AgbioInvestor working to establish this data.
Conclusion
In terms of value, the Africa and Middle East Region as a whole is currently approaching the limit of the value derived from its GM seed area. This is a result of South Africa, one of the region’s most valuable seed markets, having an effectively mature GM planted area. In countries where current utilization rates are currently low, value growth in absolute terms in limited due to small total areas. In the case of Kenya, the total cotton area in the country is less than 200,000 hectares, which limits the total value that can be derived from the area.
It is possible that value may be increased beyond increasing adoption rates through a number of processes. Not all GM crop varieties are hybrids, in the case of soybean all varieties are non-hybrid, whereas in cotton it is common for GM traits to be used in non-hybrid open pollinated varieties. By transitioning area to a hybrid GM variety, average seed price may be increased to represent the potential greater yield or production quality that comes from cultivating hybrid crop varieties. Value may be increased by growers moving away from crops containing a single GM trait such as only herbicide tolerance or insect resistance, and instead cultivating stacked gene crops that contain herbicide tolerance and insect resistance, in varying complexities. Further value may be derived from the utilization of output traits such as drought tolerance, modified oil profile or yield enhancement. Finally, the most likely source of the value growth for the region’s GM seed sector is the spread of the technology to other countries. At present GM crop cultivation is limited to five countries: South Africa, Sudan, Ethiopia, Kenya, and Nigeria, with several of these countries planting their first commercial GM crops in recent years. It is likely that as other African and Middle East countries grow in agricultural value, more countries will authorize the cultivation of crops containing GM technology as it represents potential cost savings and ease of cultivation. •