Cut flowers, foliage and plants to Japan

Trends and opportunities

The market

Japan’s import value of cut flower products under HS code 0603 in 2016 was A$466million, which reflects an eight per cent increase from 2015 (Source ITC: International Trade Centre, Trade Map).

The proportion of Japan’s import against domestic production by volume has continuously increased over ten years, and was 25 per cent in 2015 (Source: Japan Ministry of Agriculture, Forestry, and Fisheries (MAFF), Current Situation of Ornamental Flowers and Plants July 2017).

These imported cut flowers are the most commonly found varieties such as carnations, roses, and chrysanthemums from Colombia, China, Kenia, India, Malaysia, Vietnam, and also unique or high value flowers including native and wild flowers from Australia and South Africa. Reasons for such trends include:

  • Imported flowers, especially the most traded varieties, are generally cheaper than domestically produced flowers.
  • The quality of imported flowers is considered to be superior.
  • Japan’s flower production against total agricultural produce has decreased over the past eight years.
  • The ageing population amongst growers remains a challenge in this industry.
  • There are select groups of customers who appreciate and look to source unique/high value flowers.

In addition to cut flowers, potted plants and preserved flowers have increased in popularity. They require less maintenance than cut flowers and are suited to Japan’s busy and single-person households. While the import value is less than one third of cut flowers, Japan imports a variety of live plants, sold as potted plants or plants used for landscaping works.

The table shows the 12 key commodities and Harmonised System (HS) Code for imported cut flower, foliage and plant categories in Japan over the last six years (2011-2016).

 

HS Code

Product

0602

Plants, live, NES (not elsewhere specified) including their roots, cuttings and slips; mushroom spawn

0602.90.090

060290 Plants live, NES

0603

Cut flowers and flower buds for bouquets, fresh or dried

0603.11.000

Fresh Rose

0603.12.000

Fresh Carnation

0603.13.000

Fresh Orchid

0603.14.000

Fresh Chrysanthemum

0603.15.000 (*1)

Fresh Lily

0603.19.000 (*2)

Fresh Other Variety

0603.90.000

Dried flower

0604

Foliage, Branches etc.

0604.20.000 (*3)

Fresh Foliage and Branches etc.

*1: 0603.19.010 until 2011, *2: 0603.19.090 until 2011, *3: 0604.91.000 until 2011

(Source: Japan Customs, ‘Japan's Tariff Schedule as of May 16 2017’)

Opportunities

There is considerable market potential in the live plant sector and Austrade Japan is working on identifying and developing opportunities and qualified customers. This is despite the challenges that come with the sector:

  • tough quarantine requirements in Japan
  • licensing from Australia
  • limited information on transplanting and caring methods.

Opportunities for Australian products include:

  • Jacaranda, Grass Trees, Cycads and Tree Ferns
  • unique plants such as carnivorous plants, succulents and other Australian natives
  • rooted cuttings and nursery stocks of wildflowers to be grown further by Japanese growers and marketed as potted plants. Some of these plants are eventually supplied as cut flowers upon special request.

The most fresh cut flower common variety imported flowers are used to mark the following celebrations, ceremonies and occasions in Japan:

  • The chrysanthemum is Japan’s national flower and forms the Imperial Crest. Large chrysanthemums are always used for Buddhist style funerals and as offerings for the deceased.
  • Carnations are the main gift for mother’s day.
  • Potted flowers and large sized orchids are often used as corporate gifts, to celebrate the success or opening of a new office.
  • Roses are purchased for various occasions including celebrations and romantic gifts.

The category ‘other variety’ covers those that don’t have a specific HS code.

Australia holds a key position in this area because of its unique wildflowers. As a niche product, these are mainly marketed through high-end florists and used in hotels, event venues and flower schools. Wildflowers don’t directly compete with traditional or non-native variety flowers, as they tend not to be sold in bulk and don’t form part of everyday sales from retail shops. Instead, wildflowers are sold to customers seeking a special and unique variety of flower.

Fresh cut foliage items remain a niche product in this market and are generally considered an ‘add on’ item to enhance the beauty of flowers. Budgets tend to be prioritised towards flowers rather than foliage. However, some varieties such as lemon leaves, dracaena and branches of Sakaki trees are regularly used in mixed bunches and for religious occasions.

Australia’s main exports in this sector are:

  • unique native species, such as steel grass foliage
  • Koala fern
  • Umbrella fern
  • Gymea lily (the large leaves)

They are marketed mainly to high-end florists, who prepare special arrangements for hotels, event venues and special occasions. The volume currently used by Japanese customers is still very limited due to a lack of information on how and when to use Australian foliage. However, considering Japan’s general trend of seeking unique varieties, continuous promotion of foliage could stimulate interest and demand by customers.

Competitive environment

The flower trade is greatly affected by climate and exchange rates, so the market is very competitive and highly driven by price.

Taipei Chinese, the Netherlands, Colombia, and South Africa have a strong presence in ‘other variety’ flowers, but not all their products are direct competitors to Australia in terms of flower varieties. Some Japanese growers are producing wildflower varieties and the quality is improving. The growers are mainly producing potted flowers, though sometimes supply them as cut flowers upon request by wholesalers and florists for special occasions or when Australian flowers are not available.

Tariffs, regulations and customs

Tariffs

Live and rooted plants under HS code 0602.90.090 and cut flowers under HS code 0603 are free from import duties.

For plant leaves and branches under HS code 0604, the general tariff rate is five per cent, and WTO tariff rate is three per cent. This was eliminated for the Australian grown products under JAEPA.

In addition to import duties, Japanese importers are required to pay an eight per cent consumption tax against the Cost, Insurance and Freight (CIF) or Cost and Freight (CFR) value (in case the cargo is not insured) at the time of customs clearance.

Import procedures under the Plant Quarantine Law and prohibits the importation of:

  • harmful animals and plants which the Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) defines as quarantine pests.
  • soil and plants in soil.
  • plants determined as illegal for picking, cultivating or trading.
  • containers and wrappings made from illegal items.

Cut flowers, foliage and plants exported to Japan must be free from pests, diseases and soil. All products must be fumigated or cleaned completely, pass quarantine inspection in Australia and obtain a Phytosanitary Certificate prior to export.

Japanese quarantine will conduct a separate inspection at the port of entry to identify pests, diseases and soil. If identified, the importer will be required to choose one of the following options, at an additional cost:

  • additional fumigation in Japan
  • abandonment of products at the port
  • products returned to Australia.

Other regulations

Some items are registered under the Plant Variety Protection and Seed Law’s species registration system. Suppliers and importers must obtain permission for these varieties from plant breeders or the species registration agents who may charge royalties depending upon the item.

Importing endangered species is prohibited by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). However, if products are proven to be ‘commercially propagated items’ there may be exceptions granted.

Marketing your products and services

Market entry

To have the best chance of success it is important to consider the following

  • Carry out a pre-entry study of market desirability.
  • Strategically select the export item and timing of export.
  • Make efficient shipping arrangements that assure quality of products on delivery – export directly, or through an experienced consolidator or export agent.
  • Consider what types of customers you wish to do business with – regular importers, wholesalers, large retail chains, etc.
  • Visit or participate in a major flower and plant tradeshow such as IFEX/GARDEX.

Distribution Channels

The major wholesale distribution routes for cut flowers and foliage are auction houses and large flower retailers, who sometimes directly buy or import from domestic and overseas suppliers, but this is less common.

Central/wholesale markets are increasing their proportion of fixed price sales based on negotiation prior to auction. Currently, 30 to 40 per cent of cut flowers are still sold through the traditional auction system.

Japanese importers decide which markets to send flowers based on their own analysis and experience of which markets attract the highest prices. The commission for auction houses is usually around 10 per cent.

These methods are gaining in popularity, though the prices are usually higher than auction prices:

  • Pre-ordering: the Japanese importer takes orders from the auction house or the customer before placing orders to the supplier overseas.
  • Pre-auction: the auction houses sell products to the buyers at fixed prices before the auction runs.

Some large retail customers such as supermarkets buy flowers directly from suppliers or through importers. However, opportunity for sales through this route is often limited to certain varieties that are reasonably priced and ideal for volume retailers.

Some importers have established a customer base and sell direct. This includes home delivery and correspondence sales operated by the importer or their group companies. This distribution method is still small in today’s market compared to the traditional ways of central wholesale markets.

Links and industry contacts

Major Tradeshows

International Garden Expo (GARDEX)
Reed Japan: International Flower Expo (IFEX)

Government, business and trade

Japan Customs: Trade Statistic
Japan External Trade Organization (JETRO)
JETRO: Guidebook for Export to Japan 2011: Cut Flowers
MAFF: Plant Protection Station
Manual of Importing Country Requirements (MICoR)
Ministry of Agriculture Forestry and Fishery Japan (MAFF)
Tokyo Metropolitan Central Wholesale Market

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

Contact details

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