July 31, 2003
USDA Report on Japanese Imports of Soybean And Soymeal for MY 2003-04
Japan's total utilization of soybeans in CY 2002 was about 5.0 million metric tons with domestic production accounting for 270,200 metric tons and imports accounting for the remainder. Imports were mainly from the U.S. at 3.82 million metric tons, followed by Brazil (0.8 million metric tons).
Total oilseed imports are expected to remain at the same level through Marketing Year (MY) 2003-2004 (October 2003 - September 2004) as no particular demand increase nor decrease is expected.
Total soybean planted area increased 4 percent (6,000 ha) in CY 2002 as a result of policy efforts by the Ministry of Agriculture, Forestry and Fisheries (MAFF) to divert rice production to alternate crops such as soybeans.
Despite this increase in acreage, total production decreased slightly CY 2002 to due to lower yields resulting from unfavorable weather conditions in the major production areas. Both the production levels and the self-sufficiency rate met the government's current target for soybeans; however, the supply of domestic soybeans generally does not meet the quality and quantity demands of domestic users of soybeans.
Brazil and Canada rapidly increased their soybean exports in CY 1999 and CY 2000 in hopes of increasing their market share due to Japan's increasing demand for non-biotech food soybeans. However, U.S. producers and suppliers have maintained the Japanese importers and industries' confidence in their ability to supply non-biotech soybeans through a well established IP handling system. After an initial drop following the rapid increase in biotech soybeans, the U.S. share recovered in CY 2001 and CY 2002, and levels are expected to remain stable 2003.
Oil Meal Situation and Outlook
Soybean and rapeseed meals are the primary protein ingredients used in compound feed production in Japan. About 90 percent of soybean meal is used for feed production, and the remainder is used for food use such as soy sauce. Due to a strong consumer preference for non-biotech soy products, most soy sauce manufacturers are using soybean meal from non-biotech beans. Rapeseed and fishmeal are used exclusively for feed and fertilizer production.
Total meal production is declining over the long term due to the downturn in demand for feed from the livestock sector, which has been suffering from stagnant demand. Demand for meal has strengthened significantly following the first detection of bovine spongiform encephalopathy (BSE) infected cattle in Japan in September 2001. This finding forced the Japanese Government to ban the use of meat bone meal as an ingredient of cattle feed. Even when allowed, the livestock industry and feed manufacturers are reluctant to use animal-origin meals in any feed, which has created a demand for oilseed meals as substitutes for animal-origin meals.
As a consequence, total meal demands in MY 2001/2002 and MY 2002/2003 increased.
However, the demand level in MY 2003/2004 is expected to level off at the same levels of MY 2002/2003. Since domestic meal production is not expected to increase, total meal imports are also expected to remain at the current levels through MY 2003/2004.
The U.S. share of soybean meal imports decreased from 39 percent in CY 2001 to 21 percent in CY 2002 due to increased competition from China.
Japan imported 613,000 tons of soybean meal from China in CY 2002, almost doubled from 294,000 in the previous calendar year because of increasing crushing capacity in China, shorter transportation time, lower prices, and the ability to purchase smaller lots which allow direct shipments to local ports in Japan.