China's first genetically modified corn seed product

China's first GM maize seed product will enter the homeland of the world's top agricultural technology company, the United States.

According to reports, the agricultural biotechnology company Beijing Origen Seed Co., Ltd. (NASDAQ:SEED) announced that it will test the US market. The U.S. market has been dominated by giants such as Monsanto, a genetically modified giant. This is another breakthrough for Chinese companies entering this high-tech industry.

As a seed industry in the upstream of the agricultural industry, China has long been listed as a strategic emerging industry, and its internationalization is supported by the government. However, Reuters said that China's policy on genetically modified crops has many contradictions. China has invested billions of dollars in related technology research and development. It hopes to ensure the food supply of 1.4 billion people. At the same time, it is subject to deep-seated resistance to genetically modified foods. To date, no GM variety of major food crops has been approved. For planting.

In addition, according to data released by the National Bureau of Statistics on July 15, the total output of summer grain this year is 282.13 billion kilograms, an increase of 8.94 billion kilograms from 2014, an increase of 3.3%. Food crops have been harvested for the 12th year in succession, which objectively also reduces the urgency of applying biotechnology.

Earlier, it was reported that China National Chemical Corp. had sought to circumvent domestic policy constraints by acquiring Syngenta, the world's top agrochemical company.

"Consumer attitude is one thing, government attitude is more important," said Huang Dazhao, a professor at the Institute of Biotechnology of the Chinese Academy of Agricultural Sciences. He added that this has led to a significant reduction in the profitability of companies like Orrick in the Chinese market.

The Orica seed industry listed on NASDAQ in the United States has invested more than 300 million yuan in biotechnology since 2005. According to its announcement on the SEC's website, the company plans to enter the US market in 2016.

According to Chen Zheng, chief financial officer of Origen, entering the U.S. market requires several steps to be completed. For example, it is necessary to obtain a technical license and establish a local organization.

Experts cautioned that it is not easy to gain a foothold in the highly competitive US market.

The most advanced product of Orijing seed industry is a kind of corn seed with two special characteristics, or “traits”, to combat pests. Monsanto's GM maize seeds have been combined with as many as eight properties.

"The only way for them to enter the market is: the technical cost is lower than Monsanto," said Carl Pray, professor of agriculture, food and resource economics at Rutgers University.

Puri also mentioned the technical testing agreement of Beijing Dabei Agriculture Technology Group in Argentina. At the end of 2013, Dabeiong announced that it would cooperate in the breeding of soybean seeds in Latin America. He believes that compared to the United States, competition is undoubtedly more intense.

However, Chen Zheng believes that Origyn products have market space. “We know the value of this technology and American farmers are looking for alternative products.”

The company is currently approaching potential partners. However, even in cooperation with local companies, the entry of Chinese products into the United States will require the approval of regulatory authorities, which may take several years.

The Orijin seed industry is currently valued at US$33.9 million. The company believes that due to the limited capacity of the Chinese market, the market value of the company is substantially underestimated. Origen intends to sell a majority stake in its conventional seed business. Chen Zheng said, "If we attract more investment, the company's market value will be greatly improved."

From a long-term perspective, entering the top US market means that if it succeeds, it will increase market confidence in Chinese technology and thus clear the way for the Chinese government to approve more GM products.