The price increase of agricultural products is conducted upstream and the performance of seed companies depends on the quality of seeds.

The cooling of the property market and the continued heating up of the consumer market have not kept the CPI unchanged for both the one-and-a-half drop in household consumption. The National Bureau of Statistics announced on the 21st that the national consumer price (CPI) rose by 3.6% year-on-year in September, hitting a new high for 23 months.

As in previous months, food prices continued to lead the CPI rise in September, and food prices rose by 8%, of which food prices rose by 12%. The price increase of food naturally makes the market pay attention to the development trend of seed industry.

Increase in the price of agricultural products to transmit seed industry demand. From the aspect of the agricultural industry chain, seed industry is the most upstream industry in the agricultural industry chain. “If you choose to invest, you must think about the industry in the upper reaches. In theory, the seed industry The upstream industry of the terminal is resourceful and has the most primitive ability to increase.” Yang Yang’s researcher Qiao Yang said in an interview with the “Securities Daily” reporter, “In terms of capital market investment alone, seed industry is expected to benefit of."

Feng Lichen, president of China CornNet, once told the media that the price of major grain futures soared recently, reflecting that the food sector is attracting more funds. Data shows that speculative funds attracted by corn futures in September were about 6 times of the same period last year.

However, there are several major factors that influence the entire industry of seed industry. The first is the supply and demand factors. For a long time, the seed industry in China is generally in a situation of oversupply and fierce market competition. The growth in demand for seed industry is bound to be related to the increase in agricultural product prices, which may increase the farmers' interest in planting, expand the planting area, and increase the demand for seeds. “So this is the conduction of the intermediate industrial chain.” Qiao Yang told reporters .

In the same way, sales is also an important link, for example, "The success of the corn seed industry lies in the two aspects of product development and sales."

According to the analysis, the market cycle of a new breed is 8-10 years long, and it is 4-5 years short. The reason for the gradual delisting of breeds is ignored first. This requires that seed companies have the ability to continuously introduce new varieties. Only by constantly promoting new and high-quality varieties to the market can they gain new market share and strengthen the company's branding effect while maintaining the existing market share.

“In the area of ​​main production, we established the planting area at the beginning of the year. It can be said that in a certain sense, the output is basically determined.” The relevant personnel of the Securities Department of Dunhuang Seed Industry (600354) said in an interview with the “Securities Daily” reporter. "And for sales is not fixed, but to see demand, directly to the peasants."

According to the person in charge, the company's products are mainly non-owned varieties, and the company's free variety is not large. "In terms of supply, the pioneering planting will increase this year, but the selling price is almost the same as last year."

Seed industry is an alternative industry as a seed industry, it is a relatively special industry. It not only involves agricultural planting safety issues, but is also subsidized and supported by the national government. At the same time, it is also challenged by technological upgrading. “It is an alternative industry that is linked to technological progress.”

“The seeds of the general public are generally oversupply, but the supply of good varieties is in short supply, and the demand for good varieties such as Denghai Seed Industry and Longping High-Tech Group is good.” Joe Yang continued, “This type of seed is closely related to technology and contains certain Technical content. As technical advancement, there will always be an alternative. When technology is replaced, demand will decline."

It can be seen that technological progress has played a crucial role in the changes in the demand for seed industry.

The Denghai Seed Industry mid-year report showed that net profit for January-September 2010 increased by 150-180% year-on-year, and net profit was RMB 43.62 million. According to reports, the main reason for the change in performance was the sales of the main product, Xianyu 335, compared to the previous year. During the same period, the number of new varieties of maize has been accelerated, profitability has been enhanced, and benefits have achieved a recovery.

Uncertainty in Supply and Demand Caused by Weather Effects The biggest difference between agriculture and other industries is that “it is very influenced by the weather and climate”, and this feature creates uncertainties in its supply.

"Last year in southern China suffered from low-temperature weather, for example, part of the rice crop in Jiangsu suffered damage, the supply of seeds decreased and demand increased relatively. This led to an increase in demand for seed industry in the first quarter of this year, which led to a significant increase in prices of 25-30%." Guodu Securities Xu Wei told the "Securities Daily" reporter.

This year, natural disasters in China are frequent and have an impact on the supply and demand of seed industry. It is unpredictable from the perspective of weather impact.

According to the analysis, various industries, in addition to the influence of their own industries, "the currency factor also has a certain relationship." When the currency value has a certain degree of inflation, it will increase the price higher, otherwise it will maintain or decline.

From the overall analysis, the increase in the price of agricultural products will theoretically have an impact on the price of seed industry, but its impact is uncertain.