August 4, 2020

 

Volumes of beef entering Japan increase monthly in first half of 2020

 

 

Japan's beef import volumes have risen every month in the first half of this year compared to the same period in 2019.

 

Japan's Ministry of Finance figures show an overall year-on-year beef import rise of 4.65% in the first half-year, from over 293,014 to over 306,643 tonnes.

 

For US product only, import volumes jumped 8.48% from over 116,662 tonnes to over 126,533 tonnes.

 

Market watchers said that working from home due to COVID-19 partly explains the situation, while emphasising other determining factors.

 

The US-Japan Trade Agreement's implementation started in January 2020 and the import tariff decreased from 38.5% to 26.6%, with an additional decrease to 25% in April, said MEF Japan director Takemichi Yamashoji.

 

"Japanese consumers are now benefiting from lower beef tariff rates for all major suppliers," as they are also enjoying lower import tariffs under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Yamashoji said. Called TPP-11, the Pacific Rim trade agreement includes 11 nations, including Australia, Canada and Mexico. The United States withdrew from it nearly four years ago in favor of negotiating individual agreements with the members countries, including Japan.

 

Supermarkets have taken advantage of this change to promote US beef and households have welcomed the lower prices at a time when the COVID-19 pandemic has put pressure on jobs and wages, said food journalist Michiyo Nakamoto.

 

Companies have discouraged socialising over meals, making it impossible for salaried workers to eat out at the company's expense.

 

"In this environment, households are likely to appreciate the chance to enjoy a good steak (already something of a luxury in Japan) at home at reduced cost," said Nakamoto.

 

Also, in May 2019, the US and Japan negotiated the removal of longstanding bovine spongiform encephalopathy restrictions, which limited imports to beef from cattle less than 30 months of age.

 

As a result, US producers can now export beef from cattle of all ages to Japan for the first time since 2003 and, perhaps more importantly, this reduces the burden on packers to run separate production lines exclusively for the Japanese market, which drove up the cost of supplying beef to Japan, said US Embassy Minister-Counselor for Agricultural Affairs Morgan Perkins.

 

"USDA estimates that the removal of this restriction could increase exports by around 10% per year," Perkins said.

 

Another reason for the year-on-year import increase is the amount of beef imported from February to June last year was lower than usual, said Shiro Ohashi, executive director of the Japan Meat Traders Association, a group of 27 meat-importing and -exporting companies.

 

The import standard quantity under the World Trade Organization tariff-raising beef import safeguard was abolished last April. It was applied separately to chilled and frozen product and was exceeded in the fourth quarter of fiscal 2018 - January to March 2019 - due to the TPP 11 coming into effect on December 30, 2018. The January 2019 import volume surged as a consequence.

 

"Importers reduced the amount of imports because of the risk of the safeguards being triggered," Ohashi said.

 

Due to fears the safeguards would be activated in the first quarter of fiscal 2019 (April-June 2019), importers withheld some imports again, Ohashi said.

 

"As a result, the total import volume from February to June 2019 was 242,000 tonnes (98.7% of the previous year's same period)," he said.

 

The present situation's duration is totally unpredictable, Ohashi said. "I think it depends on the (COVID-19) infection situation in the future," he said.

 

Eating out demand has recovered to some extent after the cancellation of the (Japanese government's) emergency declaration, but it is still much less than before the occurrence of the coronavirus.

 

In addition, the recent increase in the number of new infections has made the situation totally uncertain, Ohashi said.He pointed out that demand for eating out will have a large impact on future demand for meat.

 

"Even if the economy recovers, I don't think that demand for meat will fully recover unless eating out recovers," Ohashi said.

 

- Capital Press