Vegetable Seed Exports Showing Great Potential   Published on November 5, 2001

Vegetables are commonly sold fresh, or may be processed in order to add value. Recently, the export of vegetable seeds from Thailand has been enjoying strong growth, and this is seen as an area of great potential that could prove to be a significant income earner for the country.

A vegetable seed is an important commodity because the degree of quality can ultimately have a major impact on yields. However, producing high quality seeds is quite a challenge in itself - it involves carefully controlling environmental factors, as well as combining the most desirable traits from various different varieties. Seed production requires much more time and technology than simply growing plants for fresh markets.

Thailand provides the ideal climate and conditions for tropical vegetables. Seeds are produced here to ensure that farmers can grow high-quality crops. Farmers that opt to produce seeds generally enjoy a higher income than conventional farmers because they often receive support from the seed companies they work for.

Farmers working in tandem with a seed company usually do so by means of a mutual contract. The seed company assists the farmer in terms of supplying technical know-how, subsidies, and regular supervision throughout the production process. On a practical level, risks during the production process are spread between the farmer and the seed company, unlike conventional farming where the farmer alone has to accept such risks. It is generally accepted that the more complex production process should lead to satisfactory profits for the producers.

At present there is only a limited number of farmers producing vegetable seeds - a survey conducted by Kasetsart University in 1998 revealed that only 9.4 per cent of vegetable farmers have been involved in seed production. One major reason for this is that many farmers simply lack the know-how.

The private sector is now playing a major role in the vegetable seed business. Several companies have opted to standardize and integrate the seed production process. Operations usually conform to the following models:

- A fully integrated operation, covering research, development, production and distribution.

- Production only. A company import seeds, reproduces them and sells them back to foreign companies. This model is common in the production of tomato, chili and watermelon seeds.

- An operation only involved in the distribution process.


The vegetable seed business is able to generate significant income when compared with other food-related sectors. Last year, for example, canned baby corn exports generated 1.57 billion baht (US$ 34.9 million), while exports of vegetable seeds reached 1.12 billion baht. This compares favorably with exports of canned bamboo shoots, which only reached 699 million baht.

Total Export Value of Thailand's Vegetable Seeds - 1997-2000

As you will see from this table, exports of vegetable seeds have enjoyed consistent growth over recent years. Last year, vegetable seed exports grew by nearly 12 per cent over 1999. In general, Asian nations are the most popular destinations for Thai seed exports. Major importers include Vietnam, Taiwan, Japan, China, the Philippines, Indonesia, Hong Kong and Malaysia.

Each importing nation has its own requirements that seeds be free from particular diseases. These are imposed because seeds could potentially carry dangerous diseases that are not immediately obvious to the naked eye. Some Thai seed production firms are expanding their production bases to other Asean nations, including Laos, Vietnam, Myanmar and Indonesia in a bid to reduce their operational costs and to benefit from cheaper labor costs.

There are currently about 50 players exporting vegetable seeds from Thailand. The leading player at the moment is Chia Tai Co Ltd, which last year generated 148 million baht ($ 3.32 million) from export sales. This accounted for a 13.2-per cent share of the market.

The local seed unit of Monsanto, Monsanto Seeds (Thailand) earned 127 million baht (an 11.3-per cent share of the market) from exports of vegetable seeds last year, followed by Seminis Vegetable Seeds (Thailand) Co., Ltd, which achieved export sales of 104 million baht (a 9.2-per cent share of the market). Other major players include Seen Seeds Co., Ltd, Adams Enterprises Co., Ltd, Sakata Siam Seeds Co., Ltd, TSA Co., Ltd, Known You Seed Co. (Thailand) Ltd, and Novartis (MPL) Co., Ltd.

Thailand has exported more vegetable seeds than it has imported over the past three years. Exports in 2000 generated 1.12 billion baht, while imports during the same year stood at just 376 million baht. In 1999 and 1998, exports totaled 1.002 billion baht and 899 million baht, respectively, compared with imports valued at 353 million and 449 million.

Just as the country has become less dependent on imported seeds, its exports have grown and are expected to continue to follow this trend.

Most of the seeds the country imports are hybrids, with particularly desirable traits. Common varieties are cabbage, cauliflower, broccoli, kale, and various varieties of lettuce. These vegetables can be grown in tropical climates, but in fact generally prefer cooler climes.

Export Value of 'Top 3' Vegetable Seeds - 1997-2000

Exports of corn seeds generated 268 million baht ($ 6.02 million) last year, representing a 45.7-per cent increase over 1999. Corn seeds were the most popular vegetable seed exports in 1997 and 1998, accounting for 203 million baht and 212 million baht, respectively.

Swamp morning glory, cucumber, cabbage and long bean seeds are also popular export items, while it is worth noting that watermelon seeds have been by far the most popular export of fruit seeds.

Seed production can only be effectively undertaken in areas where there is an abundance of fresh water. The Northeast of the country is one of the most popular areas for the production of vegetable seeds - with Nong Khai and Sakorn Nakorn being the two most popular provinces, followed by Nakorn Ratchasima, Udon Thani and Khon Kaen. Generally, seeds can be produced all year round.

Seed production in Thailand has thus far not received much support from the government because its export value is considered to be small when compared with other major food export items, such as shrimp, tuna, rice, fruits and vegetables. However, around 10 seed companies have received subsidies from the Board of Investment (BOI), according to our source.

Overall, vegetable seeds could offer great potential in terms of providing high margins.
Exports have been growing, and far outweigh imports. Thailand fortunately offers the ideal environment for developing high quality vegetable seeds, and we expect sales to further expand in the future.

The Volume and Value of Vegetable Seed Exports Under Control - 2000

Remarks: - All kinds of vegetable seeds mentioned in this report are categorized as
"seeds under control", according to the Agricultural Regulatory Division.