Update on Japan’s Pork Imports; Safeguard Trigger Unlikely

Chart comparing the change in Japan's Pork Imports in Metric Tons from 2013 to 2014

Concerns have recently heightened about triggering Japan’s pork import safeguard during the first quarter (April-June) of Japan’s fiscal year. If the safeguard is triggered, the gate price increases from 524 yen/kg to 653 yen/kg.

Japan’s pork/pork variety meat imports surged to 95,769 metric tons (mt) in May, up 11 percent from a year ago and the largest since 2005. Chilled imports of 27,049 mt were up 3 percent, as larger Canadian volume (8,640 mt, +23 percent) offset lower imports from the United States (17,211 mt, -7 percent). Frozen imports increased 15 percent to 45,433 mt, including an 18 percent increase from the EU (to 25,546 mt). Frozen imports from the U.S. (8,268 mt, +2 percent) were modestly higher, while imports from Canada (5,073 mt, +104 percent) more than doubled from last year’s low levels. Ground seasoned pork imports increased 24 percent to 16,026 mt, including significant increases from both the U.S. (12,410 mt, +28 percent) and Canada (2,469 mt, +15 percent).

January-May imports were up 9 percent to 433,358 mt, including: U.S. (185,388 mt, +4 percent), EU (119,860, +19 percent), Canada (72,579 mt, +10 percent), Mexico (27,641 mt, +15 percent) and Chile (14,236 mt, +3 percent). Growth in chilled pork (+14 percent) has been from Canada, the United States and, to a lesser extent, Mexico. Larger frozen pork imports (+4 percent) from the EU have offset smaller volumes from the U.S. and Canada. The U.S. remains the primary supplier of ground seasoned pork (total imports up 20 percent), but Canada has seen strong growth as well.

Chart comparing Japan's Domestic Pork Carcass Price from 2012 through 2014 in yen

With high picnic prices, USMEF has been anticipating that some ground seasoned pork volume will shift to ground pork, because ground pork can enter Japan above the gate price instead of being subject to the 20 percent duty that applies to ground seasoned pork. This shift may in fact be happening, but it is not yet reflected in the import data.

The first-quarter safeguard trigger (208,544 mt) will not be reached as long as June imports are less than 76,000 mt. Thus, there is room for even larger imports in June (May volume counted toward the safeguard was 65,885 mt) without triggering the safeguard. If there is a significant shift to ground pork, larger frozen import volumes could fuel concerns about triggering the safeguard in the second quarter (July-September) of Japan’s fiscal year.

Japan’s April inventory of imported pork moved higher to 144,229 mt, but was still down nearly 6 percent from a year ago. January-April pork production was down only slightly (305,000 mt, -0.6 percent) from the same period last year.

Wholesale domestic pork prices have eased recently, but in late June prices were still up more than 40 percent year-over-year for loins, butts and bellies. Tenderloins (+33 percent), picnics (+29 percent) and hams (+25 percent) also remain significantly higher than a year ago. Prices for imported chilled pork were 4 to 7 percent higher for most cuts, but U.S. single-ribbed bellies (+24 percent) and tenderloins (+14 percent) saw much larger increases. Ground seasoned pork (+32 percent) posted the largest price increase.

Sources: Japan’s Ministry of Finance, Agriculture & Livestock Industries Corporation of Japan (ALIC), Global Trade Atlas and USMEF-Tokyo