INTERVIEW-Biotech corn set for rapid Asia expansion, Syngenta says

Fri Apr 27, 2012 11:08am BST

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* China, Vietnam, Indonesia on track to approve GM corn

* Asia faces huge challenge to boost yields to meet demand

* Growing populations, meat consumption, imports key drivers

By David Fogarty and Naveen Thukral

SINGAPORE, April 27 (Reuters) - Major Asian buyers led by China are set to approve genetically modified corn within the next three to five years to give yields a boost as growing demand for meat drives greater consumption of the staple, the world's top agrochemicals company said.

Changing diets and greater wealth are pushing up demand for corn, a key source of animal feed, in Asia. But local yields are not enough to meet demand, triggering imports and inflation.

This is accelerating the push to improve yields and food security, said Davor Pisk, chief operating officer for Basel-based Syngenta (SYNN.VX), one the world's top seed firms.

China's corn yields are half those of the United States, and the world's second biggest consumer and grower of corn is becoming increasingly reliant on imports. Domestic firms are likely to introduce GM corn by 2017 or earlier.

"I would personally expect that within the next 4 to 5 years we will see GM corn commercialised in China," Pisk told Reuters in an interview in Singapore.

He said the government wanted to be certain there was public confidence in GM first as well as ensuring local firms had the technology to pioneer GM crops.

Other countries held strong sales potential for GM seeds and chemical products that kill weeds and pests, Hardeep Grewal, Syngenta's head of corn marketing for the Asia-Pacific, said in a separate interview in Singapore.

"My belief is that over the next 3 to 5 years, you will see the use of GM technology fairly widespread with small-scale growers in the Asia-Pacific," Grewal said.

And China held huge promise.

China over the next 15 years needed about 80 million to 100 million tonnes of additional corn production a year, he said.

"In order to meet that requirement, yields in China have to go up by about 2 to 3 tonnes per hectare. It's quite a challenge. It means yields have to go up 50 to 60 percent."

Yields are currently about 5 tonnes per hectare.

China is expected to produce 198.7 million tonnes of corn in 2011/12, up from 183.5 million tonnes a year ago, according to the U.S. Department of Agriculture data.

Benchmark U.S. corn futures Cc1 have climbed 5 percent from a three-month low of $5.99-1/2 a bushel, driven by China's purchases and tight old-crop corn supplies, expected to shrink to the lowest in 16 years by the end of summer.

China, which has emerged as a buyer in the past few years, has already bought more than 4 million tonnes of U.S. corn this season and has been trying to widen its sources of supply with an agreement to buy Argentine corn signed in February.

RAPID GROWTH

Vietnam, one of the world's fastest growing feed grain markets, was on track to give Syngenta approval for GM corn by the end of 2013, with yield increases of up to 40 percent possible, Pisk said.

After Vietnam's expected approval, Pakistan, India and Indonesia were likely to be next.

"Pakistan have already given the cultivation approvals. Now it has to go through the environment and food safety approvals. So they are pretty well advanced," Grewal said.

"So I would say Pakistan, and then Indonesia and India probably around the same time-frame, 2014 to 2015."

Grewal said the rapid adoption of GM corn in the Philippines over the past 7 years and hybrid corn in Vietnam showed the potential of the market.

"Vietnam is a really exciting story for corn. Only 10 years ago, not much corn was grown there," he said. "In a decade, the use of hybrid corn in Vietnam has gone to 100 percent. And farmers' yields moved from 2 tonnes to 5 tonnes per hectare with the switch."

In the Philippines, corn plantings totalled about 2.5 million hectares, with about half planted to hybrid corn.

"Small-scale farmers are very quick to adopt our technology. So the Philippines has gone from very little GM to almost 100 percent GM corn. We believe the same will happen in China."

Pisk said the company was ready to ramp up investment in Indonesia, the fourth most populous nation.

"We would expect GM acceptance there within the next 3 to 4 years and we're planning for that. So we're ready to invest aggressively in the Indonesian market as opportunities come up."

Indonesia is likely to produce 8.7 million tonnes of corn in 2011/12, up from 6.8 million tonnes a year ago. It is likely to consume 10 million tonnes during the year.

(Editing by Sugita Katyal)

((david.fogarty@thomsonreuters.com; +65 6403 5662; Reuters Messaging: david.fogarty.reuters.com@reuters.net)) Keywords: CROPS ASIA/GM

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