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AHDB Pork Country Reports


17 January 2013

BPEX / AHDB Country Reports - Japan January 2013BPEX / AHDB Country Reports - Japan January 2013

Japanese consumers are heavily dependent on pork products as it is the country’s favoured meat. However, with domestic production falling well short of demand, Japan is the world’s leading importer of pig meat. In recent years, this position has been reinforced by disease problems and natural disasters which have prevented any growth in domestic production. Imports have been dominated by North America, given the shorter distance involved, with Denmark the only EU Member State with a large share of trade. However, opportunities could open up for other suppliers if less US and Canadian pork is available.
BPEX / AHDB Country Reports
AHDB

Pig Numbers

The Japanese pig herd has been broadly stable over recent years and that still appears to be the situation. In the year to February 2012, both the breeding herd and the overall pig herd declined marginally. The fall in the breeding herd continues the recent trend of slow decline. Productivity improvements mean that the number of pigs being raised for slaughter has been more stable, with the slight fall during 2011 possibly attributable to losses arising from the earthquake and tsunami in March of that year.

While the number of pigs has been stable, the number of pig farms has declined steadily. In February 2012, there were 5,840 pig farms in Japan. This was three per cent lower than the previous year and over 40 per cent down on a decade earlier.

Japanese Pig Census, February

Source: MAFF, ALIC

Production

Slaughtering numbers in Japan over the first nine months of 2012 were two per cent up compared with the same period last year. Until September, increased throughputs were recorded in every month except for June when they were virtually the same as June 2011. However, September slaughterings were seven per cent down year on year. Nevertheless, the figures mark some recovery from the low levels in the first half of 2011 when production was affected by natural disasters. With carcase weights stable, pig meat production in Japan also increased by a similar amount.

Japanese Pig Slaughterings

Source: ALIC

Trade

Despite consuming virtually all of its own pork production, Japan is unable to meet domestic demand. Consequently, the country is heavily reliant on imports from other countries. During the first nine months of this year, its pork imports were virtually unchanged on the same period last year but shipments in the third quarter were up nine per cent year on year. Volumes from the US, the main supplier, were slightly down in the third quarter but were more than offset by shipments from Canada, which sent nearly a quarter more pork to Japan. Most other suppliers also shipped increased quantities in the third quarter than a year earlier, although Denmark’s exports for the year as a whole were still down on 2011.

For the year as a whole, imports of both chilled and frozen pork were little changed. However, in the third quarter, the drop in US volumes meant that a higher proportion of the total was made up of frozen product. North American chilled cuts have been popular due to their affordable price and high quality but increased domestic production has made Japanese pork cheaper, contributing to a small fall in chilled imports in the third quarter. Frozen imports are mainly used in processed products and volumes have fluctuated in response to stock levels, with lower shipments in the second quarter but increased volumes in the third.

January – September

Source: Japan Customs, GTIS

Prices for pork imported into Japan are subject to a gate price system which ensures that they do not fall below a fixed price. Therefore, unit prices are effectively fixed in yen terms but in US dollar terms the average price was two per cent higher than the same period a year earlier.

Japan also imports significant quantities of processed pig meat. In the first nine months of this year, shipments were up by 10% year on year at 138,000 tonnes, with the US the main supplier. Sausage imports were up 12% at 38,000 tonnes, with China supplying around half of the total.

Prices

The average wholesale price for excellent grade pig carcases remained below last year’s level throughout the first eight months of 2012 but by October was slightly up, as supplies tightened.

The price gap between the two years was largest between February and April, before prices increased in May and June, since when they have been similar to a year earlier. Higher pig supplies during the first six months resulted in the relatively lower wholesale prices, along with slightly subdued consumer demand due to competition from poultry meat.

Japanese Wholesale Prices for Excellent Grade Pig Carcases

Source: Tokyo Central Wholesale Meat Market, ALIC

Outlook

So far this year, Japanese slaughterings have been running ahead of last year’s levels. However, with a static to declining pig herd, slaughterings may be more constrained in the remainder of the year, leading to only a small increase for the year as a whole. With carcase weights little changed, pig meat production is also likely to be little changed. Looking further ahead, higher production costs fuelled by the shortages in the grain market mean that the outlook for pig market appears challenging. As a result, a small fall in slaughterings and production can be expected for next year.

Despite lower prices so far this year, pig meat consumption in Japan is following a slight downward trend due to competition from poultry meat, which is available at even lower prices. Signs are that this trend may continue into next year. With consumption down by more than domestic production, Japanese pork is likely to be available to consumers more cheaply, limiting demand for imported pork.

Japanese Pig Meat Production and Consumption Forecasts

January 2013

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