(Last updated: 23 Nov 2011)

Trends and opportunities

The market

The Japanese market for fresh fruit and vegetables has traditionally been supplied locally, with imports limited to a narrow range of products. However, due to reducing competitiveness in the domestic farm sector, instability of climate, unexpected natural disasters, and the opening of the import market, Japan has steadily increased import volumes. Fluctuations in the exchange rate also influence imports of fresh fruit and vegetables to Japan in any given year.

Japan imports significant volume of fresh vegetables from overseas and it is forecasted to continue in the years to come due to an ageing farm population, the increasing desire for a year-round supply of vegetables, and frequent poor harvests caused by recent unstable climate patterns.

The Great East Japan Earthquake and resulting tsunami of 11 March 2011 caused shortages of fresh vegetables produced in the affected areas of Tohoku, which were exacerbated by radiation contamination from damaged nuclear reactors in Fukushima. The volume and varieties of imported fresh fruit and vegetables into Japan have steadily increased as a result.  

Market size (total volume/tonnes)

(Source: Fresh Food: Euromonitor trade sources/national statistics)

Quality in Japan is paramount. Top-of-the-line in Australia may not necessarily be acceptable in the Japanese market. Japanese growers have spent considerable time and energy in consistently improving their products based on taste and appearance. However, Australia is well positioned to deliver alternative products at a much lower price and supply out-of-season.

Trends, characteristics, and the latest agricultural census in Japan, are available from The Ministry of Agriculture, Forestry and Fishery.

Opportunities

Opportunities exist for Australian fresh fruit and vegetable exporters and is aided by the following positive factors: 

• Australia’s diverse climate and soil varieties enable the harvesting of a wide variety of produce and production with low levels of chemical fertilisers. 
• Consumer awareness of Australia’s clean environment and low chemical usage adds to Australia’s appeal as a supplier of safe foods.
• Less shipping time compared to other countries in southern hemispheres leads to supply of better quality and freshness of products. 
• Improved domestic infrastructure for delivery of imported product in Japan
• Deregulation of Japanese plant quarantine laws is easing restrictions and opening up markets for new products.

Opportunities exist for a range of produce from Australia.

Fresh vegetables:

• onion
• carrot
• pumpkin (from Tasmania only)
• asparagus
• broccoli
• mushroom
• leek
• brussel sprout
• sweet corn
• truffle
• chestnut
• varieties of nuts 

Fresh fruit:

• mango
• lemon
• navel and valencia oranges
• marcot
• grapefruit 
• rambutan
• cherries (from Tasmania only)

Competitive environment

For imported horticultural products, the US is the traditional market leader, but recently China and other Asian countries have also become major suppliers, increasing both the range and volume of fresh vegetables imported into Japan.

China is recognised as one of the foremost low-cost suppliers to Japan. Other overseas producers will be challenged to supply high quality fresh fruit and vegetables at competitive prices. However, there have been cases of Chinese produce being restricted or banned from import into Japan due to the existence of high chemical residues above Japanese limits.

Australia is also facing stronger competition from Chilean and South African producers due to their location in the southern hemisphere. They are also taking  advantage of counter seasonality by supplying similar types of products at more competitive price points.

Tariffs, regulations and customs

The Japanese Government prohibits imports of fresh fruit and vegetables where soil is evident and plants have soil attached, or produce contains evidence of pests and pathogens.

Taxes payable on imported fresh fruit and vegetables are:

• Lemons – zero per cent
• Onions – zero to 8.5 per cent depending on price per kilogram
• Pumpkin, leek, asparagus, broccoli, brussels sprouts and carrots – 3 per cent  
• Mango – 3 per cent
• Mushrooms – 4.3 per cent
• Rambutans – 5 per cent
• Cherries – 8.5 per cent
• Oranges supplied between June and November – 16 per cent
• Oranges supplied between December and May – 32 per cent
• Apples – 17 per cent
• Truffles – 4.3 per cent
• Mandarins – 17 per cent
• Macadamia nuts – 5 per cent
• Almonds – bitter: zero per cent, sweet: 2.4 per cent
• Sweet corn – 6 per cent
• Chestnuts – 9.6 per cent
• Dried mango – 3 per cent
• Dried grape – 1.2 per cent
• Dried fig – 6 per cent

Please visit the Japan Customs website for the entire tariff schedule and detailed information in English at www.customs.go.jp/english/index.htm.

Industry standards

Industry standards apply and restrictions exist with the Japanese Government prohibiting imports of some fresh fruit and vegetables due to risk of pests and disease.

Information on specific standards and labelling requirements is available from the Ministry of Agriculture, Forestry and Fishery.

Chemical residue

On 29 May 2006 the Ministry of Health, Labour and Welfare (MHLW) introduced a positive list system for agricultural chemicals remaining in foods, which prohibits the distribution of foods that contain agricultural chemicals above a certain level of maximum residue limits. Agricultural chemicals include pesticides, feed additives and veterinary drugs.

This system is based on the Law to Partially Revise the Food Sanitation Law (Law No. 55, 2003), which required MHLW to adopt these measures within three years following the publication of the revised Food Sanitation Law (30 May 2003).

More information about the positive list system is available from the Ministry of Health, Labour and Welfare.

Marketing your products and services

Market entry

Market entry strategies will vary according to products and segments being targeted. Use Australia’s unique advantages to start business and win contacts, and promoting factors such as counter seasonal advantages, Australia’s diverse climate, soil variation and its established image of a clean and safe environment.

There are a number of strategies that will improve your business dealings with Japanese customers:

• Secure local representation where possible 
• Emphasise that Australia and Japan share similar time zones for rapid  business communications
• Offer various options for shipment routes – direct or tran-shipment
• Provide regular information about climate, growing conditions, harvest conditions, and traceability including use of chemicals
• Provide details of produce condition before shipment and obtain feedback from importers after landing 
• Obtain agreement for supply contract throughout the growing season
• Offer produce grown in different locations to maintain consistency of supply 
• Price, quality and meeting product specifications such as packaging are key factors for business sucess
• Agreement of a trial shipment is a positive step towards a long term supply contract
• Frequent visits to the market and follow-up with customers regularly; staying on top of their preferences and needs through research and communication

The use of e-technology to support operations in fresh fruit and vegetable importing is increasing although direct online trading is not yet an option. Many importers use email and the Internet to check produce quality by digital photo before shipping and on arrival. However, face-to-face contact with personal relationships and trust still heavily influence buying decisions.

Distribution channels

Diversification of distribution channels and importers vary according to the nature of the product and consumers. Typical distribution start with growers, then packers and/or exporters, fruit and vegetable importers and then Japanese trading companies. From that point, produce can go to either wholesale market operators, food processing companies or retailers and/or restaurants.

Other distribution options can bypass wholesalers and go directly to retailers, particularly large supermarket chain stores, food processing companies or restaurant chain outlets.

An increasing trend is emerging for grouped supermarkets with a large number of stores that have considerable buying power to import directly from growers and packers. However, this channel is only suitable for produce that can be imported directly with minimal handling and storage requirements.

Links and industry contacts

Fruit and vegetables–related resources

Market Agriculture.com – www.agribusinessonline.com

Government, business and trade resources for Japan

Japan Customs – www.customs.go.jp/english/index.htm
Ministry of Agriculture, Forestry and Fishery – www.maff.go.jp/eindex.html
Ministry of Finance – www.mof.go.jp

Australian resources

Japan External Trade Organization – www.jetro.go.jp/australia

Contact details

The Australian Trade Commission – Austrade – is the Australian Government’s trade and investment development agency.

Through Austrade’s network of offices in over 50 countries, we assist Australian companies to succeed in international business, attract productive foreign direct investment into Australia and promote 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.