International Egg and Poultry Review

By the USDA's Agricultural Marketing Service - This is a weekly report looking at international developments concerning the poultry industry, this week looking at the latest in Japan.
calendar icon 4 October 2006
clock icon 4 minute read

Japan's Broiler Situation

Japan's broiler market is facing increases in domestic broiler production and broiler imports. Although household consumption was up 2% for the first half of the year, domestic production was up 5% and imports rose 9% for the first six months of 2006. Japan's total broiler consumption in 2006 is projected to increase by 1% to 1.908 million MT. Imports of U.S. broiler meat (mostly bone-in leg) are projected to grow by 9% from last year to 35,000 MT, helped by solid demand for bone-in leg for domestic de-boning. Due to an overall surplus, import growth of the prepared and processed products is anticipated to slow during 2006. Ending stocks are expected to rise substantially, up by 21% to 145,000 MT.

Earlier estimates for domestic broiler production in 2006 totaled 1.150 million MT, slightly lower than the estimate of 1.166 million MT produced in 2005. However, producers seemed to react to uncertainty over limited imports due to avian influenza and Newcastle disease and responded by increasing domestic production this year. Producers may be speculating that there will be trade disruptions due to HPAI outbreaks in other countries. The revised domestic output in 2006 is projected at 1.195 million MT, two percent higher than the previous year. Domestic broiler meat production is forecast to decline slightly in 2007, to 1.185 million metric tons.

Surplus inventories in Japan are expected to cap import growth of processed and prepared products and create increased competition between Thailand and China in the food service and ready to eat market segments. Demand for Brazilian generic broiler meat will remain weak in 2007, however U.S. exports to Japan, mostly bone-in leg, should remain constant in 2007 at about 35,000 MT annually. Brazilian generic broiler meat imports are mostly boneless leg, and projected down 5% to 335,000 MT. Thailand has new traceability and sanitary programs and procedures that could give Thailand a marketing advantage over China, which is currently Japan’s top supplier of cooked products.

According to trade sources, some Brazilian boneless cuts have been making inroads into Japan through overseas brokers at substantial discounts. This contributed to increased imports from Brazil during the first half of the year. Prevailing surplus and overwhelming stocks are accumulating and Japan’s imports from Brazil will likely be cut back in the second half.
Source: ALIC

Japan's Trade and Economic Partnership Agreements

Japan and Chile have reached an agreement in principle on major elements of an Economic Partnership Agreement (EPA). Japan's agreement with Chile will set tariff quotas for beef, pork and chicken. Japan and Mexico have finalized an agreement that stipulates the inquota rate of Customs-Duties applied on poultry meat during the period from the second year to the fifth year after the entry into force of the Agreemnt. Tariffs on chicken will be cut by 20%.

Japan has trade agreements with Singapore, Malaysia, Philippines, Thailand and Mexico. Japan recently entered into talks with the Gulf Cooperation Council (GCC), somposed of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Source: The Ministry of Foreign Affairs of Japan, news wires

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