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July 25, 2007
USDA/FAS GAIN report MX 7051
Report highlights
Although saved seeds continue to dominate the Mexican seed
market, the quality and use of imported seeds is rising. The
value of imported seeds from all origins increased from $372.6
million in MY 2005/06 to $378.2 million in MY 2006/07, and Post
forecasts a slight increase in imports in 2007/08. Imported
seeds are most common in vertically integrated sectors and in
the production of commodities destined for export from Mexico.
Executive Summary
A large percentage of Mexican farmers continue to use saved
seeds for the following years’ planting seasons, accounting for
an important volume of planting seeds in Mexico. However, the
quality and use of imported seeds are improving. The value of
imported planting seeds increased from US$372.6 million in MY
2005/06 to US$378.2 million in MY 2006/07. The use of high
quality imported planting seeds is most common in vertically
integrated production, such as in the forage and leguminous
seeds industries, and for other sectors, such as for the
production of new vegetables, grass seeds, and the commercial
production of herbaceous plants.
Production
There is no official data on planting seed production,
availability, or distribution by kind of seed or region.
Therefore, Post uses official statistical data on crop
production and yields, as well as unofficial estimates of
planting seeds demand by major staple crops such as grains.
Leguminous seeds continue to make up the main share of the
planting seeds sector by volume. The majority of seeds used in
grain production are saved seeds. However, in 2005 and 2006, use
of common or certified seeds increased due to improvements in
the management of grain and oilseed farms, as well as increased
vertical integration in some segments of crop production.
Increased grain production by more efficient farms also added to
the use of improved planting seeds that, according to industry
sources, are less affected by weather thus reflecting
improvement in the average yields of many crops.
The evolving regulatory
environment will drive the Mexican seed industry in the coming
years. The new seed law is viewed by the industry as a positive
step towards increasing competition and removing the government
from the seed business. The plant variety law also gives plant
breeders more protection in Mexico. Moreover, the new seed law
establishes phytosanitary regulations for the importation of
seed promises to improve access to the
Mexican seed market for U.S. exporters.
The Mexican seed industry is made
up of individual farmers, large multinational companies,
national private seed companies, national public research and
seed production organizations such as INIFAP, and international
agricultural research centers such as CIMMYT (The International
Maiz and Wheat Improvement Center).
Private companies were heavily
regulated until the 1980s. Companies were limited to seed
production and marketing, with only a few companies doing
breeding. Today, however, private companies can now participate
in any phases of the seed industry from seed production and
conditioning to seed marketing and distribution.
Generally, private seed companies
sell to distributors or directly to farmers. Some vegetable and
flower seeds are sold to retailers such as supermarkets or
garden supply stores.
Domestic seed is the main
competitor of U.S. seed in Mexico. According to industry
sources, in MY 2005/06 the United States supplied around 40
percent of all seed imports into Mexico with a total value of
$237.1 million. Multinational companies are able to source seeds
from many different parts of the world. For example, Mexico also
imports a substantial amount of sorghum, corn and soybean seeds
from Brazil and Argentina, clover seed from Australia and
Europe, and flower and vegetable seeds from Europe and vegetable
seeds from Israel.
Trade
Mexico primarily uses
domestic seeds, however, imported seeds continue to play a major
role in the sector. Imported seeds are becoming more common in
the production of grass, leguminous, forage, vegetables, and
horticultural crops. The quality of imported seeds also
continues to improve. The total value of planting seeds imports
in MY 2006/07 increased to US$378.2 million from US$372.6
million in the previous year. Total imports of planting seeds
from the United States increased by 1.38 percent over the
previous year’s value to US$237.1
million in MY 2005/06. Imports of seeds from the United States
for grasses, forage and legumes for sowing increased by 14.06
percent to US$131.7 million, with grass seeds showing the
greatest increase from US$39.6 million in MY 2005/06 to US$43.3
million in MY 2006/07. Mexico’s total exports of planting seeds
to the world in MY 2006 increased in value to US$160.4 million
from US$109.3 million the previous year. The greatest increase
in exports came from leguminous seed, from US$87.1 million to
US$133.9 million in MY 2006, followed by field crop seeds at US$
13.5 million in MY2006 from US$7.6 million the previous year.
Total exports of planting seeds to the United States from Mexico
registered at US$18.6 million in MY2006 a decrease of 8.08
percent from the previous year’s figure.
In the coming years, U.S. exports
of seeds to Mexico should be helped by the new seed law. The new
seed law should lowers restrictions on seed trade while the
existing variety law should give plant breeders more protection
in Mexico. Moreover, the proposed rule that establishes
phytosanitary regulations for the importation of seeds promises
to create improved access to the Mexican seed market for U.S.
exporters.
Corn hybrid seed, however, could
be constrained for a number of reasons. The lack of water in
many areas of Mexico could hamper hybrid corn usage. Likewise,
many small farmers do not have the financial resources to switch
to hybrids because of the higher price for seeds and the higher
cost for inputs therefore, most of them will continue to use
saved seeds.
Full report:
http://www.fas.usda.gov/gainfiles/200707/146291763.pdf
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