JETRO AGROTRADE HANDBOOK 2007

9 1 Overview 2 Imports by Sector 3 Imports by Supplier Country/Area 4 Major Import Items Table Contents Table 1: Exports / Imports of agricultural, forestry and fisheries products in d

Contents

Japan’s Agricultural, Forestry and Fisheries Trade in 2006

1 Overview 1

2 Exports 2

(1) Overview (2) Exports by Sector (3) Exports by Destination Country/Area (4) Major Export Items 3 Imports 9

(1) Overview (2) Imports by Sector (3) Imports by Supplier Country/Area (4) Major Import Items Table Contents Table 1: Exports / Imports of agricultural, forestry and fisheries products (in dollar terms) 2

Table 2: Exports / Imports of agricultural, forestry and fisheries products (in yen terms) 2

Table 3: Exports of agricultural, forestry and fisheries products 3

Table 4: Exports of agricultural products 4

Table 5: Exports of fisheries products 5

Table 6: Exports of forestry products 5

Table 7: Exports of agricultural, forestry and fisheries products (by destination country/area) 6

Table 8: Major export items 8

Table 9-1: Export items increase/decrease (based on value) 9

Table 9-2: Export items increase/decrease (based on quantity) 9

Table 10: Imports of agricultural, forestry and fisheries products 10

Table 11: Imports of agricultural products 11

Table 12: Imports of agriculutural products <by supplier country> 12

Table 13: Imports of fisheries products 13

Table 14: Imports of fisheries products <by supplier country> 13

Table 15: Imports of forestry products 14

Table 16: Imports of forestry products <by supplier country> 14

Table 17: Imports of agricultural, forestry and fisheries products <by supplier country> 15

Table 18 : Major import items 16

Table 19-1: Import items increase/decrease (based on value) 18

Table 19-2: Import items increase/decrease (based on quantity) 18

Explanatory Notes

• Since April 1996, Japanese trade statistics have been issued on a yen basis only, so the

dollar conversion rate and dollar-based trade values were calculated by JETRO based on

the official rate announced by the customs director

• Unit abbreviations in the general statement and statistics indicate the following

NO Number of items TH Thousands

KG Kilograms

Japan’s Agricultural, Forestry and Fisheries Trade in 2006

1 Overview

In 2006, Japan’s trade (in dollar terms) consisted of exports totaling $647.29 billion (up 8.2% y/y) and imports amounting to $579.29 billion (up 11.7% y/y), both far exceeding the record all-time highs of the previous year The trade surplus in 2006 declined for two straight years

Exports of agricultural, forestry and fisheries products in 2006 totaled $3.87 billion (up 6.2% y/y), or ¥449.7 billion (up 12.2% y/y), with their ratio to Japan’s total exports (in dollar terms) declining to 0.60% from 0.61% in 2005

Imports of agriculture, forestry and fisheries amounted to $67.86 billion (down 0.6% y/y), or ¥7.89 trillion (up 5.4% y/y), with their share of total imports (in dollar terms) declining to 11.7% from 13.2% in 2005

Japan’s trade in agricultural, forestry and fisheries products continued to be in large structural deficit as Japan is significantly dependent on acquiring agriculture, forestry and fisheries products from overseas However, a recent increase in export of agriculture, forestry and fisheries products slightly improved trade imbalance in this field from a 1:20 ratio of exports to imports (in dollar terms, the same applies to the following figures) in 2004 to 1:19 in 2005, and 1:18 in 2006

The background of such an increase in exports lies in the aggressive stance of producers and municipalities throughout the nation targeting at an increased popularity of Japanese food overseas and increased demand for Japan’s food products caused by a general increase in income in other countries

The popularity of Japanese food is becoming increasingly established in the U.S and same popularity is growing more than ever in England and France Even for wealthy Chinese people including overseas Chinese and the rich in Russia, Japanese food is becoming popular for its delicious taste and healthiness

With this positive tail wind, in March 2005, the former Koizumi administration decided, as a cabinet decision, to formulate a basic plan for foods, agriculture and farming villages In this plan, the “Doubling of exports for agricultural, forestry and fisheries products” was set in motion in which exports amounting ¥300 billion in 2004 would double over a five year period finishing in 2009 The Abe administration took over the plan and accelerated it to aim at ¥1 trillion by 2013

In May 2007, the “Comprehensive Export Strategy for Japan’s Agricultural, Forestry, Fisheries and General Food Products” was agreed at the general meeting of the National Committee for Export Promotion of Agricultural, Forestry and Fisheries Products (Established in April 2005), which consisted of government officials and private

companies’ managers The strategy included the improvement of the export environment through negotiations with the destination countries into the acceleration of the quarantine procedures and introduction of GAP (Good Agricultural Practice) methodology at the production stage, strategic export promotion through the encouragement of an intellectual property strategy and brand strategy by item type and spreading international awareness

of Japanese food and food culture, showing that we are entering into a stage where Japan’s exports of agricultural, forestry, fisheries and general foods will be vigorously promoted

Table 1: Exports / Imports of agricultural, forestry and fisheries products

(in dollar terms)

(Unit: $1 million, %)

(Source) Ministry of Finance, trade statistics

Table 2: Exports / Imports of agricultural, forestry and fisheries products

(in yen terms)

Of the total agricultural, forestry and fisheries exports amounting to $3.87 billion

in 2006, agricultural products accounted for $2.06 billion (up 3.2% y/y), fisheries products $1.74 billion (up 10.4% y/y) and forestry products $69 million (down 5.5% y/y)

Exports have been increasing yearly for agricultural and fisheries products since

2003, this time increasing by 23.4%, and 60.6% in total over the past four years

On the other hand, forestry product exports have decreased from the previous year However, they have increased by 30.2% over the past four years

Since 2001, the ratio of agricultural exports has been gradually declining, while

the ratio of fisheries exports has been gradually increasing Agricultural exports account for 53.2%, and fisheries exports account for 44.9% of the total exports in 2006

Table 3: Exports of agricultural, forestry and fisheries products

(Unit: $1 million, %) Agricultural,

forestry & fisheries

In the category of fruit exports, both grapes and apples, which account for nearly 40% of total fruit exports increased (centering on Taiwan and Hong Kong), but pears, Satsuma oranges and persimmons fell due to a decrease in yield caused by the negative impact of climate instability and pests As a result, total fruit exports remained unchanged from the previous year Out of fruit exports, apple exports to Taiwan accounted for little more than one third (34.8%)

Exports of vegetables increased 12.0% y/y centering on the Asian market where a new breed of wealthy citizens made an appearance and in the U.S market where Japanese food popularity continued In foreign countries, interests in Japanese foods were

on the rise and the opinion that “Japanese foods are safe to eat” was established The largest item ratio in vegetable exports were arrow roots/potatoes which accounted for 27.6% Fresh mushrooms continued to increase but dried mushrooms continued to

decline because the established markets were overwhelmed by Chinese products

Exports of livestock products slightly rose 0.7% y/y, showing an increasing trend

from 2004 Untreated hides/fur skins and wool/animal hair which account for 58.6% of

the total exports decreased by 5.3% Dairy goods increased by 37.3% y/y, chicken/animal

flesh meat and meat preparations increased 8.7% y/y and live animals gained 24.4% y/y

Due to the occurrence of foot-and-mouth disease and BSE, the U.S suspended

importation of Japanese beef In February 2005, these bans were lifted, and as a result,

export of beef to the U.S jumped from $4,000 to $2.90 million

Overall exports of silk threads decreased by one third Exports of raw silk to India,

which was the biggest export destination, hit zero Its main product of silk waist exported

to China was down 30.9% y/y and to Thailand was down 77.7% y/y In 2006, silk threads

were exported to South Korea and Italy where Japan had no success in the previous year

Table 4: Exports of agricultural products

(Unit: $1 million, %) Farm products

All agricultural

Livestock products

Silk threads

In fisheries products, exports of fish (fresh, chilled, frozen and living), which

account for a little less than 50% of the total, rose 10.4% y/y, resulting in an increase for

4 consecutive years, with a decrease in tuna/bonitos but an increase in the mainstay of

salmon, trout, cod and mackerel

Exports of shellfish/mollusks decreased by 8.4% y/y mainly due to a decrease in

the mainstay of squid A total of 1.51 tons of Ise-lobsters (frozen) were exported to Hong

Kong and South Korea where there was no success in the previous year Oysters exported

to South Korea increased 85-fold over the previous year where its demand was growing

as a health food and sea squirt also increased by double over the previous year

Exports of canned and bottled products rose by 8.7% y/y, as shipments of salmon,

herring and sardines increased, but mackerel, tuna, bonito and crab decreased

Exports of both natural and cultured pearls increased and the total export increased by

3.0% over the previous year However, it remained at 0.7% up y/y in terms of numerical

quantity

Fisheries exports were spurred in part by a simplification of quarantine procedures for aquatic food for the Chinese market in September 2005 and the number of

producing areas that aggressively dealt in exports increasing

Table 5: Exports of fisheries products

(Unit: $1 million, %) All fisheries

products

Fish (fresh, chilled, frozen, etc.)

Shellfish/

mollusks

Canned and bottled preparations

Pearls

Other fisheries products

Of lumber/worked lumber, all of acicular conifer, broad leaf tree and tropical

timber fell The total exports decreased by 14.3% y/y Exports of plywood/veneers fell

10.0% y/y because the mainstay of the Malaysian market for veneers faced fierce

competition with Chinese products Other materials and rosins increased but a decrease

of particle boards offset it

Table 6: Exports of forestry products

2004 69 15 19 35

2005 73 14 20 39

2006 69 12 18 39

(Source) Ministry of Finance, trade statistics

(3) Exports by Destination Country/Area

Looking at the export of agricultural, forestry and fisheries products according to

the destination countries/areas, the previous pattern of Japan’s exportation, other than the

assistance-rice-exports, was that the United States was the largest export market,

followed by the Asian markets of Hong Kong, Taiwan, South Korea, China, Thailand and

Singapore in that order In 2005, the U.S and Hong Kong switched its position and China

and South Korea did the same In 2006, this order remained unchanged in the top 8

markets Exports to China continued in double-digit growth All categories of fisheries

exports also increased in 2006 and showed significant gain of 17.8% y/y Producing areas

and municipalities throughout Japan are aggressively developing marketing activities by

focusing their attention on the wealthy of China who are enhancing purchasing

capabilities It seems as though China will soon take over Taiwan in the list Exports to

Taiwan fell mainly due to the decline of cigarettes and exports to Thailand also decreased

mainly because of a decrease in tuna/bonitos

The five largest markets’ shares account for 74.8%, an increase of 0.2% points

over the previous year, showing a slight increase in concentration of the biggest markets

or regions

Table 7: Exports of agricultural, forestry and fisheries products

(by destination country/area)

(Source) Ministry of Finance, trade statistics

(4) Major Export Items

Pearls remained the largest item of export, with exports to Hong Kong,

accounting for 46.6% of the total Other than Hong Kong, this category succeeded in

exporting to the United Arab Emirates, the United Kingdom and Belgium Almost all

pearls (99.7%) exported from Japan are of the cultured variety

The second largest item was cigarettes, Taiwan being the largest market, which

accounts for three-quarters of the total exports However, exports of cigarettes to almost

all countries including Taiwan declined but that to the Philippines and Russia increased

The third largest item was shellfish The main item, scallops decreased by almost

30% in the U.S., the biggest market However, exports to the EU rose after the

recommencement of exports in 2003 In particular, exports to France increased by 94.4%

and also pushed into Belgium and Holland where Japan had no success in the previous year Demand from manufacturers for cooked food in France showed a strong desire for them South Korea is importing oyster shells because Kyongsang-namdo intends to re-export oysters to Japan after culturing

Exports of fourth-ranking confectionery products fared well with the mainstay chocolate centered on Asian countries and chewing gums on Middle Eastern territories

In South Korea, chocolates containing a larger percentage of cacao gained in popularity due to a health trend and chocolate exports to the country increased four times

Fifth-ranking salmon and trout ranked one ahead of the previous year as exports

to China which accounted for 90% of the total export steadily advanced Large cities in coastal areas of China such as Shanghai expanded consumption China is also re-exporting fishery products to the U.S and Europe where popularity for this item is growing due to health and hygiene reasons

Eighth-ranking mackerel registered a general advance including in its mainstays

of China, South Korea and Thailand and the exports resulted in a 3.3 times increase Consequently, it rose up the ranks sharply from 20-th place Reasons for the increase were 1) mackerel used for processed materials targeted at China enjoyed bumper yields and therefore were sold for a very low price for the first time in 20 years and 2) mackerels generally exported to South Korea were almost the same in quality as those caught in Cheju Island and generally lower in price In Japanese restaurants in Thailand, a popular set menu item is mackerel broil with salt and teriyaki

40th-ranking squid and preparations greatly fell back from 29th as exports to China (which was the largest buyer) almost fell by half from the previous year The reason was that China increased its imports by 16 times (quantity base) compared to the previous year from Argentina because the country enjoyed a good yield