Sri Lanka Seed Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Sri Lanka seed market is expected to register a CAGR of 3.1% during the forecast period (2022-2027). The COVID-19 pandemic has affected the production, certification, distribution, and cost of seeds, which developed obstacles in agricultural sectors and food systems in developing countries like Sri Lanka. The industry suffered from severe labor crisis due to restricted movements which impacted the production, supply crunches due to limited transportation which affected the distribution, and a contraction in the market for plants and seeds created problems in terms of the production of seed for international trade, as well as access to high-quality seed of modern varieties for domestic agriculture.

In Sri Lanka, a biodiversity hotspot, seed production activities are dominated by the public sector, notably the Department of Agriculture’s Seed and Planting Material Development Centre. The country has opted for a sui generis system for the protection of plant varieties. Most of the quality seed in the country is imported and distributed to farmers by the private sector. As Sri Lanka is dependent to a large extent on imported seed, in 2017 the Department of Agriculture and Lal Teer Seed of Bangladesh implemented a project to increase vegetable seed production in the country. There is an increasing need to introduce suitable legislation protecting plant breeders’ rights, which would encourage greater involvement by private sector companies. According to the FAO, rice being the major staple crop of Sri Lanka, registered a production volume of 3,929,831 metric ton in 2018. The country's vegetable production volume was about 969,244 metric ton during the same year, which was less than that of the previous year. This created the demand for quality seeds for production. Variation in the production of cereals and vegetables necessitating the requirement of quality seed for consistent production and to increase productivity. With Sri Lanka being a large community of farmers, Rice and curry are the main food consumed thus creating the need for increased production to meet the domestic consumption requirement.

Key Market Trends

Increase in production of rice and maize

Agriculture, the mainstay of the economy, employs about 35% of the working population and contributes 21% to GDP. The majority of farmers in Sri Lanka use rice seed produced on-farm or obtained from neighboring farmers, through an informal seed supply system. This is resulting in the yield of rice crop to slightly vary over the years. Rice is a staple food in Sri Lanka’s diet and lifestyle. Close to one quarter of the population is directly or indirectly involved in agriculture, and about 40 percent of the arable land is under paddy cultivation. Consecutive national governments have given prominence to paddy over other field crops in agricultural policies. Farmers favor planting rice, since it requires less attention. Paddy receives a generous package of subsidies and ultimately is more remunerative. The development of irrigation systems has enabled farmers to resettle in dryer zones with dry but richer soils. The Accelerated Mahaweli Development Program initiated in the late 1970s is the largest irrigation program in the country. It is a multi-purpose development scheme designed for generation of hydroelectricity, irrigation, and water for domestic consumption. Irrigation water from major systems and renovation of old tanks helped expand land under paddy cultivation. Maize is the second most common food crop grown in Sri Lanka. Accroding to Food and Agriculture Organisation (FAO) in 2020, maize production for Sri Lanka was 40,067 thousand ton. In order to increase the production and productivity of the rice, quality seeds are required which implicates the demand for the seed market in Sri Lanka.

Rice Dominates the Cereals Market

Cereals have been an important part of the Sri Lankan diet. The country produced 5.12 million metric ton of rice in 2020 which is 0.53 metric ton more than the previous year. Rice, millet, maize, and sorghum are some of the cereal crops grown in Srilanka. According to FAO, Rice and maize are the majorly produced cereals crops with a production share of 94.2% and 5.8% in 2020. Rice is the staple food of the 21.8 million Sri Lankan population. Rice consumption is increasing marginally on annual population growth of 1.1 percent. The government of Sri Lanka (GOSL) and health authorities actively encourage rice consumption over wheat consumption. Red rice is gaining on white rice in popularity. Red rice grain and the bran are becoming recognized for their better nutritional qualities since they are rich in vitamin B, minerals, protein, fat, and fiber. With the ever-increasing demand for rice in the country in terms of domestic demand as well as exports, rice seeds play a key role in the Srilanka seed market.

Competitive Landscape

The Sri Lankan seed market is fragmented, because of the presence of a large number of local players marketing certified seeds. The major players in the market are Tropical Seeds/OPEX Holdings, CIC Agri-Business, Hayleys Agriculture, Plantchem Pvt Ltd (Plant Seeds Private Limited), and Advanta Seeds. These major players are investing in new products and improvisation of products, expansions, and acquisitions for business expansions. Another major area of investment is the focus on R&D to launch new products at lower prices.

Additional Benefits:

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

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