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Wednesday, May 25, 2022

Origin Agritech Limited (SEED) stock gained in the Current Market; here is why?

After announcing two purchase agreements, Origin Agritech Limited (SEED) stock gained in the current market. SEED stock price is $8.71 gaining more than 19.34% from the last close. SEED stock closed at $7.30 at the end of the last trading session with a trading volume of 424.14K shares.


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Agriculture Technology Industry Overview

As the agriculture industry became more data-centric with the advent of the Internet of Things, agriculture companies have seriously thought. The data helps the farmers and companies growing fruits and vegetables greatly benefit from it. The importance of data with the help of AI and IoT has restricted and disrupted every industry, including with agriculture industry. The organized agricultural data helps improve the farming techniques, which helps the farmers and companies improve their production.

According to research done in 2020, the global agriculture industry was worth around $1.1 trillion in 2020. Industry experts have forecasted that the industry’s total value would be around $3.08 trillion in 2025, with a compound annual growth rate of 22.9%.

The growth in agriculture technology would be triggered by the increasing demand for agriculture technology to increase the productivity of the farming land. This would also help the farmers decrease its cost, increase their production, and integrate the whole farming steps.

SEED: Purchase Agreements

Origin Agritech Limited (SEED) announced in a press release that they had signed two purchase agreements of delivering 50,000 metric tons of nutritionally advanced corns with two feedstock companies.

To compensate the corporation for the extra value of the maize, the feedstock companies have committed to purchase it at market pricing upon delivery. Based on current market pricing for maize, the total selling price might be as high as 150 million RMB (3,000 RMB per metric tonne). Management may soon revise its forecast in light of the results of this acquisition, which they are now analyzing.

Conclusion

The company’s growing expertise in agriculture speaks for itself and is becoming popular in the industry. The nutritionally enhanced corn produced by Origin Agritech has reduced the use of expensive soybean meal for feedstock companies. As a result, they are getting an increasing number of orders.

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