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The global hybrid rice seeds market size was USD 2.06 billion in 2019. The global impact of COVID-19 has been unprecedented and staggering, with hybrid rice seeds witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 9.9% in 2020 as compared to the average year-on-year growth during 2016-2019. The market is projected to grow from USD 2.26 billion in 2020 to USD 5.43 billion in 2027, growing at a CAGR of 13.32% in the 2020-2027 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Hybrid rice is a type of rice obtained by breeding two different parental lines to significantly out yield other rice variants. It was first introduced in China in1970 as an initiative to curb the impending famine in the country. Hybrid rice helps in filling the yield gaps and increases the yield potentials, enticing farmers in the seed market. This aids the farmers in generating higher incomes as well as contributes to achieving food security for the ever-increasing global population. The rising adoption of hybrid rice by the farmers due to its improved heterosis that increases the yield by 20-25% than the conventional rice is projected to enhance future growth in the upcoming years.
Border Closures and Transportation Delays amid COVID-19 to Affect Growth
The global outbreak of the COVID-19 pandemic has resulted in lockdowns and border closures, which has impacted several industries. Supplier quality discrepancies and underperformance of logistics service providers are among the main reasons for the supply chain discrepancies. However, according to the International Seed Federation (ISF), the impact of COVID-19 was slightly less on the seed industry as seeds are considered among the essential agriculture items and were allowed to function in the lockdown with appropriate safety measures. Various countries such as India, the U.S., and Japan enabled harvests with subsidized procurement of farm machinery as farm laborers were unavailable. For example, the government of India set up special cargo and courier services for the movement of essentials such as seeds to ensure farmers can continue to grow crops and grains and prevent food shortage amid COVID-19 and in the long run.
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Hybrid Rice Seeds Attaining Food Security to Propel the Market Growth
According to the United Nations Food and Agriculture Organization (FAO) 2019 data, the global rice production accounted for nearly 755 million metric tonnes in 2018, with around 90% being produced in Asian countries. Recent technologies have led to the development of hybrid type of rice seeds that produce 20-25% higher yields and offer increased resilience to abiotic and biotic stress conditions, requiring fewer inputs such as water and pesticides. With an increasing population across the world, the demand for rice is also surging in the market as rice acts as a staple food for ~60% of the global population. Thus, rice yield per unit area has also grown to meet this growing demand and serve rice to several end-users. The government and various research institutes are collaborating to come up with new hybrid rice variants and promote their utilization by the farmers. For instance, in September 2019, the International Rice Research Institute (IRRI) and African Agricultural Technology Foundation (AATF) signed a four-year partnership agreement to help farmers in Africa to increase their rice productivity and income by adopting good quality rice seeds and sustainable agronomic practices.
Increasing Consumption of Rice Globally to Augment Hybrid Rice Seeds Market Growth
According to the Food and Agriculture Organization (FAO), rice provides 27% of the dietary energy supply, 20% of the dietary protein, and 3% of the dietary fat to nearly 33 developing rice-consuming countries. Global rice consumption is witnessing robust growth, which is driven by factors, such as high population and economic growth in the developing countries. According to the report published by Organization for Economic Co-operation and Development 2019, Asia Pacific and Africa are the two major consumers of rice worldwide. The report also states that the global consumption of rice is projected to increase by 67 million tonnes by 2028. Thus, farmers are intensively focusing on increasing rice yields with their limited lands, which is anticipated to further boost the adoption of hybrid seeds in the market.
Proliferating Demand for Stress Adaptable Rice to Drive the Market
Sustainable rice cultivation is challenged by various abiotic and biotic stresses. This has led to the incorporation of stress tolerance in high-yielding varieties and has been proven to be a very effective approach for developing these varieties that can cope with such situations. This is increasing the demand for hybrid rice and mitigating the losses caused by the stress factors. The hybrid seed manufacturers of rice are also laying emphasis on technological advancements for developing seeds that are resistant to microbial infestations and generate higher-yields in a comparatively short span of time than the inbred varieties, which is anticipated to drive the growth. For instance, in January 2018, Bayer AG launched Arize AZ 8433 DT hybrid rice seed with dual attributes including tolerance to drought and Bacterial Leaf Blight and Brown Plant Hopper diseases.
Regulatory Hurdles and High R&D Costs to Hamper Growth
The full-fledged adoption of hybrid rice is held-back by the factors such as longer regulatory approvals and their high research and development costs. The regulatory approvals are time-consuming due to the frequent changes in law enforcement and amendments, which are regulated by the new rules and regulations laid down by the government. For instance, in India, in 2019, a seed bill was passed, which threatens the seed sovereignty and freedom along with undermining the rights of the farmers. Such factors lead to clashes between the farmers and the government; thereby, hampering the overall seed sector. The high R&D cost is another reason hampering the market performance. Thus, the overall hybrid rice seeds development and manufacturing is a long and costly process that acts as a major restraint in its market growth.
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3-line Breeding System to Emerge as the Dominant Segment Due to its Stability
On the basis of type, this market is segmented into 3-line breeding systems and 2-line breeding systems. The 3-line hybrid breeding system is accounted for holding the major share as it’s the most widely used breeding system due to its proven attributes in increasing vigor, resistance to pests, and high-quality. The benefit of this system comprises the ability to maintain stable male sterility throughout the process. However, there are a few shortcomings for this hybrid rice seed breeding system, which led to the development of a 2-line breeding system. This segment is witnessing significant traction among growers as several studies have proved that 2-line breeding systems have a yield advantage of 10% over the 3-line but the higher cost of research and development results in slow growth in the market. However, the technology is expected to grow at a decent pace during the forecast period 2020-2027.
Medium Grain Size Segment to Exhibit High Growth Owing to its High Consumption
The medium-sized rice grain seeds are expected to hold the major share owing to their worldwide popularity, especially in Asian countries, due to their moist, tender, and slightly chewy texture. The cultivation of medium grain rice seeds in countries, such as Thailand, India, and China, is higher. At the same time, the countries, such as the U.S. and the UAE, prefer the consumption of long grain rice. According to the United States Department of Agriculture (USDA) data, in 2018, the long-grain rice category held 70% of the market share in the U.S. as it is the most consumed and produced rice variety in the country. Thus, the long grain rice exhibits significant potential to grow in the upcoming years.
Asia Pacific Hybrid Rice Seeds Market Size, 2019 (USD Billion)
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Asia Pacific leads the global hybrid rice seeds market and is anticipated to remain the same in the forecast period due to the increasing demand and consumption of rice in the region. Countries, such as China, India, Vietnam, and Thailand, are among the major producers of rice. Hence, they hold the larger chunk in the global rice seed market.
The adoption of hybrid rice seeds technology in the region has been supported by the government as agriculture contributes to a major share in the region’s economy. The government is encouraging the farmers to cultivate hybrid rice by promoting sustainable farming through assistance, tax incentives, and exemptions, and providing these hybrid seeds at a subsidized price. Several collaborations between the government and private organizations are being initiated to increase hybrid rice production. For instance, in 2019, China and the Philippines started a rice-breeding program. The Philippine-Sino Center for Agricultural Technology (PhilSCAT), with the help of grants from China, has developed four varieties of hybrid rice. These varieties have successfully passed the Philippine rice cooperative tests and are set to be launched in the market. Such factors have helped in creating a positive image of hybrid rice seeds technology in the region, which is anticipated to further boost the market performance.
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The Middle East & Africa is projected to hold the second-largest share in the market. The consumption of rice in various African countries and Saudi Arabia has emerged as a market trend. Various technologies such as artificial intelligence (AI) are being utilized for obtaining improved results in the hybrid type of rice seeds. For instance, in January 2019, the International Rice Research Institute (IRRI) teamed up with Germany-based biotechnology company Computomics GmbH for utilizing its latest bioinformatics tools to speed up the analysis and advances in rice cultivation and breeding. Such initiatives are expected to augment key regional growth in the forthcoming years. North America and Europe are witnessing substantial growth in the market as the demand for rice products is increasing gradually in the regions.
Companies Embarking Upon Strategic Acquisitions and Partnerships for Business Fortification
The market is moderately consolidated with the presence of a few prominent global players. Companies, including Syngenta AG, Bayer AG, Nath Bio-Genes Ltd., UPL Ltd., RiceTec, Inc., and Biostadt India Ltd., are concentrating on business partnerships, collaborations, and strategic acquisitions for their business fortification and diversifying their product portfolio by introducing new products in the market. For instance, in January 2019, RiceTec, Inc., announced the acquisition of rice seed assets of Ganga Kaveri Seeds of Hyderabad, which will help the former company to utilize superior rice seed genetics of Ganga Kaveri for launching new hybrid rice variants in India.
An Infographic Representation of Hybrid Rice Seeds Market
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The market research report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of the market size and growth rate for all possible segments in the market. Along with this, the report includes an elaborative analysis of the market dynamics and competitive landscape. Various key insights presented in the report are an overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key hybrid rice seeds industry trends.
Value (USD Billion)
By Grain Size
Fortune Business Insights says that the global market size was USD 2.06 billion in 2019 and is projected to reach USD 5.43 billion by 2027.
Growing at a CAGR of 13.32%, the market will exhibit promising growth in the forecast period (2020-2027).
The 3-line breeding system is expected to be the leading breeding segment type in the market during the forecast period.
Increasing global consumption of rice is the key factor boosting the market growth.
Syngenta AG, Bayer AG, Nath Bio-Genes Ltd., UPL Ltd., RiceTec, Inc., and Biostadt India Ltd. are some of the key players in the market.
Asia Pacific dominated the market share in 2019.
The medium-sized rice grains are likely to be most widely consumed worldwide.
Strategic partnerships, collaborations, and acquisitions are the key market trends.
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