June 8, 2023

 

Japanese beef exports decline due to trade restrictions

 

Japanese beef exports faced setbacks last year, primarily due to US tariff-rate quotas and Chinese import restrictions, which pose a threat to the country's ambitions of expanding its agricultural and marine product exports in 2023 and beyond, Nikkei Asia reported.

 

In 2022, beef exports dropped by 4%, amounting to JPY 52 billion (~US$372 million; JPY 100 = US$0.71). This marked the first decline in two years, despite a 14.3% increase in Japan's overall agricultural, forestry, and fishery exports, reaching JPY 1.41 trillion (~US$10.07 billion).

 

While the overall exports achieved a record high for the tenth consecutive year, bolstered by a 42.4% increase in scallop exports and a 21.5% surge in whisky exports, the decline in beef shipments is notable.

 

Japan's premium wagyu beef is highly sought-after globally, with beef exports reaching a record JPY 53.7 billion (~US$383 million) in 2021, an 85.9% increase compared to the previous year and 15 times higher than a decade ago. The government aims to further expand annual beef exports to JPY 160 billion (~US$1.1 billion) by 2025.

 

The slump in beef exports in 2022 is particularly significant as the Japanese government had prioritised beef as a key product, and sales were rising due to the post-pandemic recovery in dining out.

 

The US, previously the largest market for Japanese beef, experienced a sudden decline. The US operates a tariff-rate quota system, allowing countries to export at a rate of 4.4 cents per kg until it reaches a global intake of 65,005 tonnes. Beef exports exceeding the quota face a tariff of 26.4%.

 

Last year, Brazilian exports to the US surged due to a drought in Australia, which limited Japan's beef presence in the country.

 

The 2023 quota has already been exhausted, as reported by the US Customs and Border Protection agency. Data from the US Department of Agriculture revealed that Brazil accounted for 84% of the quota between January and March, with the imposition of 26.4% tariffs again starting in May.

 

In April, Japan's Agriculture Minister Tetsuro Nomura met with his American counterpart Tom Vilsack ahead of the Group of Seven agriculture ministers meeting in southern Japan. Nomura called for the US to review the tariff-rate quota framework.

 

China presents a promising market, but Japan also faces obstacles there. The U.S. Department of Agriculture ranks China as the world's largest beef import market, accounting for 30% of global imports. China's beef consumption is second only to the US. But since 2001, Beijing has restricted beef imports from Japan due to an outbreak of bovine spongiform encephalopathy, commonly known as "mad cow disease." Although the restriction ended at the end of 2019 with the implementation of domestic food safety rules, negotiations between Japan and China on the matter have stalled.

 

-      Nikkei Asia