April 15, 2004
Barriers Raised on China's Meat Exports To Japan Consequent of Bird Flu Outbreak
An eFeedLink Exclusive Report
Following the outbreak of bird flu in several Asian countries in late January and February, Japan has taken action to suspend the import of live poultry and related processed products from several countries, including Vietnam, Thailand, Laos, Pakistan, China and Indonesia.
The bird flu outbreak had happened at a time when Japan was grappling with the impact caused by the discovery of mad cow disease in the US in late 2003, which led Japan to terminate the import of US beef. In early February, wholesale prices for meat in Tokyo rose significantly, and retail prices for beef and chicken meat soared by nearly 40%. Ensuring food safety and a stable food supply has once again become a hot topic in Japan.
1. Dietary Habits of The Japanese Result In Lower Meat Consumption in Japan Compare to in
Europe and the US
1.1 Basic Facts About The Japanese Meat Market
Compared to Europe and the US, Japanese consumes less meat, and more seafood and eggs. According to the MAFF (Ministry of Agriculture, Forestry & Fisheries) statistics, the average Japanese in 2002 consumes 11.7 kg of beef, 16.9 kg of pork, 14.3 kg of chicken meat, and 0.6 kg of other types of meat. Additionally, a Japanese, on average, consumes 20 kg of eggs (about 345 eggs).
Although Japan produces merely 40% of its food supply, its average self-sufficiency ratio for meat hit as high as 56%; specifically, Japan was 36% self sufficient in beef, 62% in pork, 68% in chicken meat, and 96% in chicken eggs. In 1997, Japan produced 750,000 tons of bacon, 1.3 million tons of ham and 3.02 million tons of sausages.
To change the status quo of having the lowest self-sufficiency ratio of food among the developed countries, the Japanese government is working hard to improve the production and quality of agricultural products, targeting to produce 3.24 million tons of meat in 2010, with an average self-sufficiency ratio of as high as 61%. In particular, it aims to produce 630,000 tons of beef, 1.35 million tons of pork, 1.25 million tons of chicken meat and 2.47 million tons of chicken eggs, with a self-sufficiency ratio of 38%, 73%, 73% and 98% respectively.
1.2 Chicken Meat - The Second Most Consumed Meat In Japan
As one of the primary meats consumed in Japan, chicken meat has seen a gradual year-on-year increase in its consumption, making it the second most consumed meat after pork.
Japan's self sufficiency in chicken meat is higher than that in other meats, importing only 30% of its total chicken meat consumed. Japan consumed 1.73 million tons of chicken meat in 2002, of which 500,000 tons were imported, with 180,000 from Thailand, 170,000 tons from Brazil, and 120,000 tons from China, accounting for 36%, 34% and 24% of the chicken meat imports respectively.
To cut down on production and business costs, Japan imports vast quantities of processed chicken products such as chicken thigh cuts from Thailand, China, Brazil and the US every year to supply to the food and beverage businesses for use in preparing grilled chicken skewers (yakitori) and fried chicken. Between January and November 2003, Japan produced merely 14,000 tons of chicken thigh cuts, while 399,000 tons were imported, of which 65% came from China and 32% from Thailand.
2. The Impact of The Recent Bird Flu Outbreak On Japan's Meat Consumption
2.1 Swift Necessary Precautions
The Japanese government reacted swiftly to the bird flu outbreak, implementing a series of prevention measures. The Chinese government confirmed that within less than an hour of the outbreak, Japan has announced the suspension of all live poultry and related processed products from China.
An MAFF study revealed that following the outbreaks of the US mad cow disease and the bird flu outbreak, 90% of Japan's consumers expressed reservations towards Japan's food supply, and hoped that its food self-sufficiency ratio will be raised from 40% to 85%. This is likely to stimulate Japan to accelerate the restructuring of its agriculture industry, further expanding domestic agriculture production and thereby improving the self-sufficiency in food products.
2.2 Sharp Rise in Chicken & Other Meat Prices
The rising wholesale and retail prices of chicken meat and other meats reflect a 'domino effect'. With dwindling inventories, wholesale prices for Japan's imported chicken thigh cuts have risen sharply in recent period.
According to figures from Japan's Agriculture and Livestock Industries Corporation (ALIC), Japan consumed 932,000 tons of beef in 2002, 60% of which, or 558,000 tons, were imported. 30% of Japan's beef imports were from the US.
2.3 Import Chicken & Its Related Products From Other Countries
As Japan turned to alternative countries for its supply of chicken and related products, Japan's consumption of vegetables and fish substitutes has increased. With the channel for importing chicken meat and its related processed products from China and Thailand cut, the respective meat production enterprises, importers' associations and food and beverage businesses in Japan have hurried successively to expand domestic production, using local produce to substitute the imports.
In addition, Japan have also increased its chicken meat imports from the US and Brazil, while also planning to import chicken meat from Canada and Mexico, in an attempt to make these countries its new sources for chicken meat.
3. The Impact Of The Bird Flu Outbreak On The Export Of China's Agricultural Products To
Japan
The bird flu outbreak has an impact on the repute of China's agriculture products in the Japanese market. With successive bird flu outbreaks in China, Japan has turned to Brazil and other countries for alternative sources of chicken meat. At present, Brazil has replaced China and Thailand as Japan's largest source for chicken meat processed products.
Brazil intends to capitalize on the present opportunity to sign a long-term supply agreement with Japan, completely reversing the status quo in Japan's chicken meat and processed products import market. Brazil wants to ensure the reaping of market opportunities brought forth by the bird flu outbreak in Asia would be long term. China's related enterprises face the peril of losing part of the Japanese market, the effect of which may also extend to the export of other agriculture products to Japan.
Japan's increasingly stringent import quarantine system makes it more onerous for China's agriculture and aquatic products to enter the Japanese market. Japan's MAFF is currently studying the conditional, partial lifting of the import ban on chicken meat processed products, requiring the bird-flu-affected country, as the export country, to submit a formal application when exporting processed chicken meat products to Japan for use in making grilled chicken skewers.
Japan will then send its experts to examine the export country's bird flu outbreak situation, and conduct an on-the-spot investigation of the processed facilities for chicken meat. This is to ensure that the processed facilities do not harbor any contagious viruses, that the overall production process is hygienic and safe, and that requirements are observed for processed chicken meat products to be heated at a high of 70 degree Celsius for over one minute.
Japan has implemented a system of labeling the product origin for live and fresh imported products such as meat and vegetables. This shows that Japan is capitalizing on the bird flu outbreak to extend the system of product origin labeling and to strengthen its control over the import of food products, including poultry meat. This will undoubtedly raise the barrier for China's agricultural and aquatic products to enter the Japanese market.
