Grains and pulses to Japan

Trends and opportunities

The market

Japan relies heavily on Australia’s agricultural commodities and imports around A$697 million in grains, oilseeds and pulses from Australia each year (Source: Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)). Key to succeeding in the Japanese export market is having products that are environmentally sustainable, ability to trace the origin of your product, and high safety standards.

The United States 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 to Japan are the United States, China, Australia and Canada. Australia is in a unique market position due to its location in the southern hemisphere and ability to supply counter-seasonal product, and also to maximise the value of non-GMO products, which are preferred by Japanese consumers.

Australia exports large amounts of raw materials to Japan. 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 now depend on supplies from Australia, including Japanese udon noodles which use over 90 per cent Australian wheat. Many leading Japanese companies have established facilities in Australia to secure long-term wheat supplies. According to the Japanese Ministry of Finance, Japan imports approximately 50 per cent of its wheat from the US, 30 per cent from Canada and 20 per cent from Australia, and this balance has been stable for several years. The production of Japanese wheat has increased only minimally in recent years.

Barley is another Australian raw material imported by Japanese beer companies, shochu (distilled spirit) manufacturers and as feedstock. It is also used in research studies on water-soluble dietary fibre for functional foods. ‘Super Barley’, a dietary fibre base for functional food, increased its profile and significant market potential after being profiled on a Japanese television program in September 2016.

There is also increasing demand in Japan for coarse cereals, especially rolled oats and chia seed, as food manufacturers develop nutritional products such as energy bars and drinks. Millet exports from Australia are gradually increasing with an expansion of sales in health-related products. Japanese product developers continue to explore new opportunities in this area.

Edible soybeans currently have a self-sufficiency ratio in Japan of 21 per cent. Japanese domestic soybeans have a higher protein content than imported soybeans so foreign products must distinguish their unique features in order to compete in the market. Australian soybeans are non-GMO and remain attractive to the Japanese market. However, an inconsistent supply of product from extreme climate patterns has pushed up prices, resulting in limited success in exports to Japan to date. Demand for Faba/broad beans into the Japanese market continues to grow and this is an area of opportunity for Australian suppliers.

Japan is heavily dependent on the US, Canada and China for other pulses. Demand is stable, and consumption has not increased in Japan over the last few years. As prices increase in China there are new export opportunities for Australia now and in the future.

The agri-grain and pulses sector is highly competitive and gaining insights from key end-users is essential to market your product effectively. In this competitive environment, Japan has also become more conscious of food safety and traceability in supply chains. As Australian producers develop significant advances in production methods and increase awareness for the need to trace products, Australia is well placed to export to Japan in this sector.

Opportunities

Australian agribusiness companies have been active in Japan for many years and there are market opportunities in the following areas:

• Sustainable supply including contract farming
• Non-GMO grain products for both human consumption and as feedstock
• Traceable products
• Environmentally sustainable products
• Agribusiness-related services
• Collaboration in research and development
• Developing product with Japanese importers
• Super grains (e.g. Barley-Max)
• Joint venture production and contract farming investment partnerships.

Tariffs, regulations and customs

Industry standards

Industry standards 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:

• Conduct detailed background research on the market.
• Research potential partners and target them in order to 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 and 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 and 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 as 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.
• 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

Central Union of Agricultural Cooperatives 
Ministry of Agriculture, Forestry and Fisheries 
Plant Protection Station - Ministry of Agriculture 

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Contact details

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