Japan has bought abundant supplies of cheap grain from abroad for decades, but some industry experts warn that it may face a crisis in the near future if China turns net importer from net exporter of corn.

Corn is the most heavily used grain in Japan for the production of animal feed, sweetener, beer, snacks and other foods.

China has long been a major corn supplier to Asian importing countries, such as South Korea, Japan and Malaysia. But with a growing number of affluent mainlanders consuming more meat, dairy products and sweetener, corn demand in China is set to surpass output, leading to heavy imports of the grain by the country.

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China's emergence as a major corn importer could aggravate the tightness of the global corn market, adding to the pressure caused by growing US demand for ethanol as an alternative fuel and making it hard for Japan to secure enough corn at low cost.

"If China becomes a net corn importer when exportable US corn declines, that will cause serious problems," said Marubeni Research Institute director Akio Shibata, adding that China could become a net importer as early as next year.

Japan, which consumes a massive 16 million tonnes of corn a year, is totally dependent on imports, sourcing over 90 percent of its supply from the United States. That volume represents about 20 percent of corn traded annually on the world market. The United States, the top corn producer and exporter, has been shipping about 20 percent of its corn output overseas.

But Shibata expects the export ratio will fall to 10 percent in the next few years, with the remainder consumed domestically.

US ethanol output is expected to more than double from last year's 13.25 billion liters to 28.39 billion by 2012, as higher oil prices boost the use of cheaper alternatives to gasoline.

About a third of a bushel of corn is needed to produce 4.5 liters of ethanol.

"Next year, the volume of US corn used to produce ethanol is likely to exceed the amount of US corn exports," Shibata said.

China, which exported 15 million tonnes of corn in 2002, suspended subsidized corn exports in March due to high domestic prices. In May, a top mainland corn processor bought 50,000 tonnes of US corn - China's first major corn import in years.

"China will certainly become a net corn importer, although their corn imports are unlikely to grow as dramatically as their soybean imports," said Ruan Wei, senior researcher at Norinchukin Research Institute.

The mainland turned a net soybean importer in 1996 and is now the world's biggest importer of the oilseed.

But China is eager to remain self- sufficient in key grains such as corn and rice, and will try to minimize its dependency on corn imports, Wei said. Still, the country will eventually source about 10 percent of its corn needs - estimated at over 130 million tonnes this year - from abroad, she added.

Long-standing corn importers such as Japan, South Korea and Taiwan will face tougher competition if China becomes a big importer.

The United States is a dominant supplier with over 50 million tonnes a year of exports - about 70 percent of global exports. Other exporters include Argentina and South Africa, but their exports are much smaller than US supplies.

Nobuyuki Chino, president of grain trading firm Unipac Grain, said the United States would continue to be a key supplier that could meet booming demand from China and elsewhere, although he did not rule out the possibility of supply shortages if US corn crops were to be hit by a drought.

If corn supplies tighten, US ethanol output will likely be hit hardest by high corn prices, as importers who need corn as feed or food must buy the grain at any cost, he said.

But supplies of non-genetically modified corn will likely dwindle as US producers are set to expand planting of genetically modified corn to raise yield and output, he said. GMO corn already accounts for about two-thirds of total US corn-planted areas.

Japanese food processors, which use about four million tonnes of corn annually, seek non-GMO varieties as consumers are concerned about the safety of GMO crops.

"There may be no other option for the Japanese than to buy GMO corn, as non-GMO crops will become less widely available," Chino said.

REUTERS