Japan imports hit 14-year high

18 May 2017

Japan beef imports during the first quarter were the highest since 2003, at 119,000 tonnes swt (albeit only marginally larger than 2011 and 2012). While US competition has ramped up significantly over the past year, additional demand has also resulted in increased shipments from Australia, despite ongoing supply restrictions and high prices.

Growth drivers

Beef imports usually increase this time of year with the onset of summer and the golden week holiday (April 29 – May 5) period assisting consumption. Great weather during this year’s vacation period and supermarkets running imported beef promotions provided an additional boost to demand.

However, beef import growth has also been underpinned by a continued contraction in local supply. As reported by ALIC, beef production in Japan over the twelve months ending March was 324,000 tonnes (product weight) – the lowest volume since 2001 following several cases of BSE.

Also reflecting tight supplies, Japan beef cold store inventories are at a four-year low. In addition, while paling in comparison to imports, Japan beef exports have grown to record volumes over the twelve months ending March, exceeding 2,000 tonnes swt for the first time (ALIC).

Working in Australia’s favour this year has been the latest (but modest) beef import tariff reduction in April – under the Japan-Australia Economic Partnership Agreement (JAEPA) – and the recent surge in US cattle and beef prices (see this week’s US buyer story).

Aussie cuts grow

Australian beef exports to Japan have increased 11% year-on-year over the January to April period. Frozen grassfed beef, particularly manufacturing product (22,000 tonnes swt, up 37% year-on-year), has recorded the greatest growth – unsurprising given it has the least overlap with predominantly chilled grainfed US beef.

Australian grainfed beef exports have still managed to expand 7% so far this year despite increased US competition. Grainfed manufacturing (12,000 tonnes swt, up 23%), silverside (4,600 tonnes swt, up 56%), chuckroll (3,300 tonnes swt, up 5%) and blade (3,300 tonnes swt, up 9%) recorded strong growth over the January to April period, while grainfed brisket exports were steady (6,000 tonnes swt).

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