Grains and pulses to Japan
(Last updated: 21 August 2013)
Trends and opportunities
The market
Japan relies heavily on Australia’s agricultural commodities with traceability, environmental sustainability, and safety as core elements for success in the Japanese market. Japan imports approximately A$5.5 billion worth of products from Australia per annum.
(Source: Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES))
The US grain belt drought of 2012 pushed up world food prices (with soybean and corn prices at historic highs), placing pressure on food security. The largest agricultural exporters (in order) are the United States, China, Australia (7.1 per cent) and Canada. Australia is in a unique position due to its location in the southern hemisphere to supply counter-seasonal products and maximise the value of high ratio of non-GMO products, which are preferred by Japanese consumers.
Australia exports large amounts of raw materials to Japan. In 2012, Australian wheat exports to Japan were approximately 19.3 per cent. Japan’s low self-sufficiency rate (currently estimated at around 40 per cent) means that Japan is heavily reliant on imports of food ingredients like agricultural commodities. Many traditional food products in Japan are now heavily reliant on supplies from Australia. For example, Japanese udon noodles use over 90 per cent Australian wheat and many leading Japanese companies have established facilities in Australia to secure long- term wheat supplies. Barley is another Australian raw material imported by Japanese beer companies and is also used in research studies on water-soluble dietary fiber. There is a big demand for millet (cereal) in Japan, as food manufacturers develop nutritional products, such as energy bars and drinks. Millet is exported by Australia in small amounts and increasing with sales in health-related products. Edible soybeans currently have a self-sufficiency ratio in Japan of approximately 21 per cent.
Japanese domestic soybeans have more protein content than imported soybeans – so in order to export soybeans, capability across different varieties according to use is key. The Australian soybean is non-GMO and as such attracts attention. However, due to uneven supply because of the reliance on weather patterns (which results in high prices) there has been only limited success in exports to Japan.
As for other pulses, Japan is heavily dependent on the US, Canada and China. Demand is stable, as consumption has not increased in Japan over the last few years. Price increases in China mean there are export opportunities for Australia going forward.
The agri-grain and pulses sector is very competitive and contact with key end-users is essential. In this competitive environment, Japan has also become more conscious of food safety and traceability in supply chains. With significant advances in production methods and a higher awareness of the need to trace products amongst Australian producers, Australia is well placed to export to Japan in this sector.
Opportunities
Australian agribusinesses companies have been active in Japan for many years and there are market opportunities in the following areas:
- Sustainable supply including contract farming
- Non-GM grain products for both human consumption and as feedstock
- Traceable products back to farm gate
- Environmentally sustainable products
- Agribusiness-related services
- Collaboration in R&D
- Development of varieties with Japanese importers
- Super Grains
- Joint venture production and contract farming – opportunities for investment partnerships
Tariffs, regulations and customs
Industry standards
These vary according to the product. Traceability, safety, and environmentally friendly practices are highly valued and have become the minimum standard required for market entry.
Marketing your products and services
Market entry
Tips for market entry into Japan include:
- Conduct detailed background research on the market.
- Research potential partners and target them – build a trusting relationship. Provide Japanese customers with extensive support to market your products, and ensure products are branded.
- Ensure requests from importers and all related regulations/responsibilities are understood and agreed upon.
- Understand the requirements of end-users through the value chain.
- Maintain contact and communication with partners on a regular basis.
- Business partners / customers in Japan many not have a high level of English fluency so be prepared.
- Ensure all customer enquiries are answered promptly.
- Use different channels of communication such as telephone, email, and video-conferencing systems to ensure you understand your business partners.
- Support your business partners’ promotional activities – this will assist in developing the relationship and understanding the Japanese business culture and user needs. Japanese customers seek strong on-the-ground support, and generally it takes a long time to launch a business or any new products.
- Link your products to Australia to leverage the safe, clean, and green image Australia enjoys in Japan.
Links and industry contacts
Government, business and trade resources for Japan
Central Union of Agricultural Cooperatives – www.zenchu-ja.or.jp/eng
Ministry of Agriculture, Forestry and Fisheries – www.maff.go.jp/e/index.html
Plant Protection Station - Ministry of Agriculture – www.pps.go.jp/english/index.html
Contact details
The Australian Trade Commission – Austrade – is the Australian Government’s trade, investment and education promotion agency.
Through a global network of offices, Austrade assists Australian companies to grow their international business, attracts productive foreign direct investment into Australia and promotes Australia’s education sector internationally.
For more information on how Austrade can assist you, contact us on:
Australia ph: 13 28 78 | Email: info@austrade.gov.au
A list of Austrade offices (in alphabetical order of country) is also available.