Chinese seed companies should speed up research and development for biotech seeds in anticipation of increased penetration of foreign products despite high barriers, auditing and consulting firm Deloitte says today.

Global players like Monsanto and DuPont are well integrated on the seed value chain from R&D to distribution and further into farming and food procession. They already have a 10 percent market share in China where they set up joint ventures to meet regulatory requirements.

China's seed industry is highly fragmented with about 8,700 seed producers and over 100,000 distributors, according to a new report by Deloitte. They are focused on conventional seeds.

Biotech seeds still face great barriers to enter China where the public is wary of transgenic crops.

"Compared with the global seed market, China's biotech seed market has a very low penetration rate. In 2010, biotech crops only accounted for 2.2 percent of the total crops grown in China," said Yann Cohen, chemical sector leader for Deloitte China.

The Chinese government has announced policy support for the production of both conventional and biotech seeds, particularly corn, cotton, rice and wheat, Cohen said in an interview.

Chinese players should act now to put themselves in good position and invest more in biotech seed research and development since a fine product takes years to reach the market, he said.