BEIJING/SINGAPORE China's farmers are using higher-yielding seeds and embracing modern technology in a shift that makes it less likely China will be a long-term major corn importer.
Record Chinese imports of 5.5 million tonnes in 2011-12 helped drive up benchmark Chicago corn prices to $8 a bushel earlier this year - more than double the average of the past decade - and raised the prospect of the world's second-biggest consumer becoming dependent on big overseas purchases.
But the government, which has always pushed for self-sufficiency in what is also the world's No.2 corn producing nation, has approved the use of more hybrid seed varieties and given more money to state farming institutions.
With new hybrid seeds, some farms in China's northeastern grain belt are already matching corn yields in the U.S. Midwest, around double the average Chinese production of 5 tonnes per hectare.
China's corn crop is forecast at a record 200 million tonnes this year, according to the U.S. Department of Agriculture, and imports are expected to tumble.
"My view is that within the next 7-10 years the gap in terms of demand and supply will probably be reduced to close to zero if the technology can reach the farmer," said Diego Diz, China corn marketing lead for Monsanto.
A sizeable reduction in China's imports could leave big exporters such as the United States and Argentina with no ready alternative outlets, analysts said, as there's little or no growth in demand elsewhere.
"China might not emerge as a major corn importer given efforts to boost yields," said Abah Ofon, a commodities analyst at Standard Chartered. "But they'll remain opportunistic buyers, taking U.S. corn as and when the price is low."
Seed firms such as Monsanto Co (MON.N), DuPont (DD.N) Pioneer, Syngenta AG SYNN.VX and their Chinese joint venture partners are set to roll out more drought-, pest- and weed-resistant hybrids, with a focus on tougher stalks and roots needed for mechanised harvesting and more intensive planting.
Better management of pests and weeds, which can cost up to a fifth of the crop, is boosting yield gains, said Diz, adding that teaching farmers not to harvest their corn too early could boost yields by another 7-10 percent.
"China's corn farming practice is at a turning point," said Haiquan Zhang, chief China representative of Germany-based KWS SAAT AG (KWSG.DE), one of the world's top plant breeding firms.
The scale of China's challenge to meet surging demand for meat, and the corn to feed the animals, is enormous.
"Over the next 15 years, China needs 80-100 million tonnes of corn, additional corn, a year," said Hardeep Grewal, Syngenta's head of corn marketing for Asia-Pacific. "It means yields have to go up 50-60 percent."
Farmers in Heilongjiang, which borders neighboring Russia, have expanded their corn fields further north, helped by seeds that mature early, offering high yields in a shorter growing period, local farmers said.
"There are better returns from corn and farmers are willing to invest more in machinery," said Zhou Changchun, a technician from Gongqing farm. "Corn output in the past 4-5 years has started to pick up, thanks to early matured seeds."
MIND THE (YIELD) GAP
DuPont Pioneer's Xianyu 335 hybrid seed has proved popular in the region, said farmers and a Beijing-based U.S. grains industry official, who noted that early planting yielded 10-20 percent more than other hybrids.
Hybrid Yunrui 8, which has resistance to ear rot and storage pests and performs well under drought, yields about 7.5 tonnes per hectare, said B.M. Prasanna, director of the International Maize and Wheat Improvement Center's global maize program.
The Mexico-based centre is closely working with Chinese seed firms and state agricultural institutes, drawing on a gene bank of 27,000 samples of domesticated and wild corn varieties.
Yunrui 47 can yield up to 14 tonnes per hectare under high-density planting, according to Fan Xingming, Director of the Yunnan Academy of Agricultural Sciences, right at the top of U.S. corn yields.
Hybrids have modernized planting as some seed firms guarantee 95 percent germination, meaning farmers no longer have to place 2-3 seeds per hole, hoping at least one germinates.
"These seeds are revolutionary for China, and are welcomed by farmers even with higher prices," said the U.S. official, who didn't want to be named as he is not authorized to talk to the media.
Crop density, which has a direct impact on production, is up by around half to 60,000 plants per hectare from five years ago, but still lagging the U.S. level of around 80,000.
New varieties also mean reduced fertilizer use, and improved water efficiency - a critical factor in the increasingly water stressed northeast. By 2025, much of China's northeast will become either severely or extremely water stressed, according to the Aqueduct Water Risk Atlas managed by the World Resources Institute in Washington.
Water shortage was one factor cited by China's agriculture minister on Friday as a threat to the country's ability to feed itself, along with growing land and labor shortages.
"To ensure grain security...We will breed a new type of agricultural player and develop proper-scale mechanised farming," Han Changfu said at a session of the ruling Communist Party congress.
As is often the case in China, where there is progress, there is potential profit - for counterfeiters.
"There are a lot of fakes out there - most are just buying cheap seeds and putting them in fancy packages," said another Beijing-based U.S. agricultural official, who asked not to be named as he is not authorized to talk to the media.
"Farmers just buy the seeds that look like they might work and aren't too expensive. They have no real information."
(Additional reporting David Stanway in BEIJING; Editing by Michael Urquhart)