Beef consumption in Japan to rise by 4%
Japan has increased the meat consumption over the past 10 years reaching a 3.4% growth in 2017 in this market. Still, the beef consumption was decreasing for two consecutive years according to a note released by Steve Burak, Kathy Baylis, Jonathan Coppess And Qianting Xie from the University Of Illinois, as Drovers portal informs.
Nevertheless, beef consumption in Japan is expected to rise by 4% this year pumping up a volume of imports that has already reached 851.000 metric tonnes in 2017, putting the country on the third spot between the largest import markets in the world. Despite the fact that Japan was a big market for beef exporters in the US, Australia could be the big winner in this case.
In 2016, total agricultural exports from the US to Japan exceeded 11 billion dollars of which beef accounted for 1.5 billion dollars. Japan was the main export market for the American beef since 2010 but Australia's influence is becoming more important as a BSE crisis in cattle herds from the USA in 2003 stopped the shipments of beef to the Asian country for a few years. After the ban was cancelled in 2006, US beef businesses have regained a part of the market share, by now covering about half of all beef imports.
The economic partnership agreements seem to be the key to decide the winner in this competition. For now, Australia is having its momentum operating under the Japan-Australia Economic Partnership Agreement signed in 2015. By contrast, USA could lose a big market share just from the decision to withdraw from the Trans-Pacific Partnership (TPP).
The first sing of losing the influence in the Nippon market was the decision made by Tokyo officials in 2017 to increase tariffs on frozen beef to 50% from 38.5%. Although the emergency safeguard was triggered in order to respond to an increase of 17% in imports in the first quarter of FY 2017 the tariffs will be in effect until March 2018, when the fiscal year is ending in Japan. By contrast, Australia faces a tariff rate of 27.2%.
The lack of any economic partnership between USA and Japan is a big impediment for American beef exporters to expand their influence on this market. The market for frozen beef is a perfect example of how producers from the US are losing in front of Australian competitors.
Japan's beef imports in August 2017 (first full month of increase) marked a decrease of 26% for frozen U.S. beef imports while Australian imports increased 30%. The 53% market share for Australian beef in Japan could increase dramatically in this year while the US producers may have to face new competitors from Canada, Mexico and New Zeeland as those countries are still a part of TPP agreement.
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