July 17, 2003

Japan's Pork Safeguards And Its Impact On US Exports

Some packer/exporter sources this week said it appears likely that Japan's safeguard on pork imports will be triggered and become effective in August due to increased purchases made during the April-June quarter.

Japan's pork safeguard is triggered when imports for a given quarter exceed by 19% or more the average for the same quarter during the three previous years, according to the U.S. Meat Export Federation. If triggered, the safeguard would be effective then through the end of the fiscal year, which is March 31, 2004.

If the pork safeguard is triggered, it would raise the minimum gate price from 524 yen per kilogram to 653 yen/kg. That increase would effectively reduce imports but particularly affect products valued below the new higher gate price.

Many of the fresh chilled pork items, such as boneless loins and tenderloins, produced and shipped by the U.S. to Japan, are priced well above the minimum gate level, so they are not affected by the safeguard. Other products including many of the items normally shipped as frozen are affected.

It is these lower-priced items that likely could see the most reduction in terms of volume shipped if the safeguard is triggered and the gate price is increased to 653 yen.

Industry sources in the U.S. said it appears that there has been a significant boost in shipments of frozen pork products primarily from other supplying countries that could lead to the safeguard being triggered.

The sources also said it could take possibly another week or two before it is known for sure if the safeguard will go into effect. If triggered, it will be effective Aug. 1.