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2004-05 Update
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The article written below was originally submitted in May, 2003. However, policy changes in China in 2004 have changed, at least for the short term, grass and legume seed imports from Canada.
In 2003 and 2004, China’s imports of other agricultural commodities greatly increased, resulting in massive expenditures to purchase commodities such as soybeans and corn. The value of agricultural imports from the USA alone increased from $906 (US) million in 2002 to $4.48 billion in 2004.
Due to this huge trade imbalance, China’s central government implemented a large change in their agriculture policy, placing a bigger emphasis on encouraging their own farmers to produce more soybeans, corn and cotton. Under this new policy, Chinese farmers have more incentive to grow grains. As well, the central government set aside $2.47(US) billion to support the taxation system in rural China, allotted $1.2 billion (US) as direct subsidies for farmers, and set “increasing farm income” as a priority in 2005.
As a result, Chinese agricultural policy shifted from the livestock sector (dairy, beef production) to traditional grain commodities. 2003 and 2004 has shown a huge drop in grass/legume imports from Canada, with some container loads of purchased seed rerouted, sold, or not taken by Chinese buyers. The total value of Canadian grass/legume seed exported to China has dropped from over $11 million (01/02) to under $3 million (03/04). (Charts supplied in this article have been updated.)
It is hoped that this policy change will only be temporary, allowing China to get back on her feet in terms of crop production. Her erosion problems remain, as does China’s want to increase her livestock industry. The USA continues to export grass/legume seed into China. This is primarily due to the recent decline in the US dollar on world markets (makes American product cheaper) and China continuing need to beautify her cities in the eyes of the world (continued purchasing of turf grass seed).
Overview
With China opening up her borders to international trade and its attempt at self-sufficiency, the markets for forage seed have greatly expanded in that nation. With emphasis on:
- Increasing their beef and dairy production
- Beautifying their nation in the eyes of the world (Beijing Olympics, 2008), and
- Reclamation of severely eroded lands, especially in the inner Mongolia region, forage seed market opportunities in China have opened up.
Since the mid-1990’s, the USA has increased their forage seed presence in China. In the early 1990’s, the Oregon Seed Council identified China as a potential future market. Since then, forage seed imports from the USA have climbed, with total forage seed exports to China continuing to rise. Crop year 02-03 (July-June) saw USA forage seed exports to China rise 29.2% over the previous year (02-03 total @ 13.3 million lbs). Chinese import of grass seed from the USA is dominated by tall fescue, which accounts for over 43% of total imports. Other American cool-season turf grass species dominate Chinese grass seed imports, with annual ryegrass, perennial ryegrass, and Kentucky bluegrass accounting for the next most popular grass seed imports. Of note for Canada, fine fescue exports by the USA to China showed a 165% increase over the previous year. In total, USA sales to China reached $7.5 million (US).
Canadian forage seed exports to China have also increased substantially, with over 5.4 million kgs of forage seed landing in China in 2002. However, due to drastic cutback in buying of Canadian alfalfa seed in 2003, total forage seed exports to China fell 30% from the previous year. Alfalfa seed exports to China fell from 5.1 million kgs (2002) to 2.79 million kgs (2003), a drop of 45%. However, buying of other Canadian forage seed species has increased.
| Table 1. Chinese Imports from, by crop year (July-June), MT |
 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 |
| USA | 2,127.7 | 3,488.1 | 4,942.7 | 6,094.0 | 7,460.0 | 7,304.1 | 11,081.9 | 12,157.7 |
| Canada | 205.9 | 109.1 | 152.6 | 631.2 | 2,684.0 | 5,795.3 | 3,765.3 | 1,466.4 |
Alfalfa Seed Sales to China
The majority of seed exports from Canada to China consist of alfalfa seed. Relatively cheap prices dramatically increased alfalfa exports to China these past three years.
In 1999, only 9000 kgs of alfalfa was exported to China. However, 2000 saw a large jump to over 378,000 kgs. In 2001, Canadian alfalfa seed sales totaled just under 1 million kgs (998,000 kgs), surpassing the USA as the number 1 supplier of alfalfa seed to China. In 2002, Canadian alfalfa seed sales saw over 5.1 million kgs landing into China. However, this past year, alfalfa sales fell 46%, resulting in only 2,792 MT of Canadian alfalfa seed being exported to China. (Total US 2003 alfalfa exports @ 681.8 MT). Relatively low prices for North American alfalfa seed greatly influenced China’s presence in the Canadian alfalfa seed market. Export data indicates that the alfalfa shipments from Canada are split 52% and 48% between common and certified seed respectively.
Other Forage Seed Sales to China
Prior to 2003, of the total forage seed exports to China by Canada, 94% of the trade involved alfalfa. However, that percentage really turned around in 2003, as alfalfa exports to China accounted for 73.9% of Canada’s total forage seed exports. Although alfalfa seed constituted the majority of forage seed imports into China from Canada, some headway has been made with other forage species.
Trade statistics for 2003 shows marked increases in other turf, grass and legume species being imported by China. Tall fescue, red clover, creeping red fescue, perennial ryegrass, smooth brome grass, and birdsfoot trefoil exports all increased from the prior year. A lot of our cheaper, lower quality, Canadian seed may be finding it’s way over to China, as China continues to be a very price sensitive marketplace.
| Table 2: Canadian Exports to China, Crop Year (Jul-June), MT |
| 99-00 | 00-01 | 01-02 | 02-03 | 03-04 |
| Alfalfa | 232.2 | 1,044.9 | 4,947.0 | 2,935.5 | 963.7 |
| Red clover | - | 21.0 | 115.5 | 206.7 | 253.7 |
| Alsike clover | - | - | 5.0 | 1.0 | 46.8 |
| White clover | - | - | - | 40.0 | 20.0 |
| Creeping Red Fescue | - | 286.0 | - | 50.0 | 37.2 |
| Tall fescue | 3.0 | - | 118.0 | 112.0 | 125.0 |
| Meadow fescue | 84.0 | 145.9 | - | - | - |
| Fescue nes | 85.0 | 738.5 | 21.0 | - | - |
| Kentucky blue grass | 109.0 | 5.2 | 2.0 | 10.0 | - |
| Rye grass, annual | - | 42.0 | - | - | - |
| Rye grass, perennial | 8.0 | 0.6 | 1.0 | 51.3 | - |
| Timothy grass | - | 80.0 | - | 10.0 | - |
| Brome grass, meadow | - | - | - | - | - |
| Brome grass, smooth | 43.0 | 63.3 | 52.3 | 278.0 | 7.0 |
| Wheatgrass, crested | 25.0 | 0.0 | 60.0 | 13.0 | 12.0 |
| Wheatgrass, nes | 42.0 | 62.1 | 26.7 | - | - |
| Bird's-foot trefoil | - | - | 2.0 | 42.5 | 1.0 |
| Wild rye | - | 20.0 | - | 15.0 | - |
| Seeds of forage plants | - | 174.6 | 445.0 | 0.3 | - |
Total Forage Seed Exports | 631.2 | 2,684.0 | 5,795.3 | 3,765.3 | 1,466.4 |
| Source: Statistics Canada, World Trade Atlas |
| NES = not elsewhere specified |
The USA continues to be the largest supplier of forage seed to China, exporting over 11.7 million kgs of product in 2003. The USA is the main source of turf grass varieties for China. Tall fescue, Kentucky bluegrass and Annual and Perennial Ryegrass continue to be the main turf grass species being imported. Warm season grasses, bermudagrass, sudangrass, and bentgrass, are also being imported in large quantities. The value of USA forage seed going into China was over $18.8 million (US$). This was up over $5 million from 2002 ($13,445,000 in forage seed sales to China).
| Table 3: USA Forage Seed Exports to China 2000 – 2003 |
| USA Forage Seed Exports to China (MT) |
Crop | 2000 | 2001 | 2002 | 2003 |
| Fescue, Tall | 1415.1 | 1312.8 | 2835.1 | 3012.0 |
| Bluegrass, Kentucky | 1094.4 | 678.1 | 839.5 | 956.0 |
| Ryegrass, Annual | 494.2 | 195.1 | 671.7 | 1706.0 |
| Ryegrass, Perennial | 295.4 | 233.5 | 604.3 | 703.5 |
| Burmudagrass | 183.4 | 333.3 | 379.8 | 556.8 |
| Alfalfa | 787.3 | 795.1 | 333.3 | 681.8 |
| Fescue, other | 16.1 | 4.4 | 165.0 | 281.4 |
| Timothy | - | 73.5 | 109.8 | 0.0 |
| Sudangrass | 38.0 | - | 60.0 | 55.9 |
| Bentgrass | - | - | 38.8 | 20.0 |
| Source: FAS |
| *Top 10 forage seed exports to China, 2002 other than unspecified |
Value of the Chinese Forage Seed Market to Canada’s Forage Seed Industry
Canada’s forage seed exports is big business. Although the last two years has seen export values fall, the previous 3 years saw over $100 million worth of forage seed leave Canada. The USA remains Canada’s main importer of forage seed, but China’s presence is being felt. From only $70,000 worth of business in 1999, Canada exported over $11 million worth of forage seed to China in 2002, before seeing those numbers fall to just over $9 million last year. China’s buying of Canadian forage seed now accounts for over 10% of Canada forage seed exports. This rise has occurred over the past 5 years, but could be enhanced by convincing Chinese buyers that Canadian forage seed varieties can adapt to their conditions.
| Canadian Exports of Forage Seeds China, Crop Year, 2000 to 2004p (MT) |
| 99/00 | 00/01 | 01/02 | 02/03 | 03/04 |
| Alfalfa total | 232.2 | 1,044.9 | 4,947.0 | 2,935.5 | 963.7 |
| Clovers, total | - | 21.0 | 120.5 | 247.7 | 320.4 |
| Bird's-foot trefoil, | - | - | 2.0 | 42.5 | 1.0 |
| Total Forage Grasses | 110.0 | 205.4 | 138.9 | 316.0 | 19.0 |
| Total Turf Grasses | 289.0 | 1.0 | 142.0 | 223.3 | 162.0 |
| Other | 0.0 | 1,411.8 | 445.0 | 0.3 | - |
| Total Forage Seed Exports | 631.2 | 2,684.0 | 5,795.3 | 3,765.3 | 1,466.2 |
| Value: Million $ CDN | 1.754 | 6.017 | 11.038 | 10.211 | 2.978 |
Summary
As China grows as a nation and economic power, its need for forage seed, not only for beautification, but for reclamation of its deleted grasslands, and development of its dairy and beef industry, will continue to grow. Forage seed will continue to be consumed as forage seed planting continues. Price will play a large factor in future sales, as will finding the right mix for the Chinese environment. So far, Canada has made tremendous stride into this market place, and with the proper product, expertise and know-how, can continue to make in-roads into this marketplace.
Link to report "Chinese Forage Seed Markets"
The contents of this page are no longer available.
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For more information about the content of this document, contact David K. Wong.
This document is maintained by Brenda McLellan.
This information published to the web on July 10, 2003.
Last Reviewed/Revised on December 12, 2008.
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