(Yicai Global) March 21 -- Shares in Xinjiang Talimu Agriculture Development, Wanxiang Doneed and other Chinese seed producers jumped today after Chinese distiller Kweichow Moutai said its parent firm the Kweichow Moutai Group is entering the seed market to produce the grain needed to make its famed liquor.

Talimu Agriculture’s share price [SHA:600359] soared by the exchange-imposed limit of 10 percent to end the day at CNY8.12 (USD1.28) while Wanxiang Doneed [SHA:600371] also surged 10 percent to finish at CNY13.66. Other seed producers, such as Shandong Denghai Seeds [SHE:002041] and Yuan Longping High-Tech Agriculture [SHE:000998], also did well with gains of 7.93 percent and 6.58 percent respectively.

Kweichow Moutai Group Hongyingzi Agricultural Science and Technology Development will be based in Renhuai, southwestern Guizhou province and will focus on cultivating the seed for the glutinous sorghum used to make Moutai, unit Kweichow Moutai said on March 19.

Setting up the seed unit will consolidate raw material production, expand the industrial chain upstream to seeds and form omni-industry chain quality control to ensure the taste never changes, the Zunyi, Guizhou province-based company said.

Branching into agricultural science and technology will satisfy the company’s need to guarantee quality sourcing for the production of its highly sought-after alcohol, General Manager Li Jingren said.

The prices of agricultural produce such as soybean and wheat have recently hit a 14-year high, propelled by geopolitical factors, Huaxin Securities said in a recent research note. This has increasingly highlighted the issue of food security and put more emphasis on the planting industry.

China’s newly amended law of seeds came into effect on March 1, giving better protection to seed intellectual property and encouraging breakthroughs in seed research and development, the report said.

Editor: Kim Taylor