Beef imports into Japan – volume down, but steady rise in value

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Japan imported 493,986 tonnes swt of beef during 2015, valued at A$ 3.7 billion – while the volume declined 5% year-on-year, the total value increased 16% over the same period, to be the highest yearly value since 2001 in A$ terms (Ministry of Finance).

In the global context, Japan was the second largest beef importer in both volume and total value, at the average import value of A$7.50/kg for the year (up 22% from 2014).

Key developments in 2015 include:

• Increased share of Australian beef at 59% (from 54% in 2014), at the expense of the US (at 33%, down 3 percentage points from 2014) where supplies were constrained by reduced production.
• While two tariff reductions under Japan-Australia Economic Partnership Agreement (JAEPA) assisted to reduce import costs for Japanese importers, it didn't result in an increase in import volume. Combined with the tight supply from the US, total beef import volume in 2015 was the lowest since 2009.

In terms of in-market demand, performance by major imported beef users was mixed during 2015:

• Yakiniku (Japanese/Korean style barbecue) dining remained popular in 2015, contributing to an increase in beef offal import value (up 22% year-on-year to A$774 million).
• Fast food – the hamburger category struggled to reinvigorate consumer demand, constrained by strong manufacturing beef prices and slow sales recovery. Gyudon beef rice bowl operators (largely US shortplate buyers) improved their sales and per customer spend.
• Supermarkets – Sale of meat products including imported beef increased, underpinning demand for Australian chilled grainfed products.

Looking forward, major influencing factors for the Japanese imported beef market include:

• Japan’s economic landscape – consumer confidence is improving but still fragile
• US beef production (anticipated to increase in 2016), US$ exchange rate (likely to remain strong), and US shortplate prices (key item for Japan)
• Demand for Australian beef from other markets – namely the US, Korea and China