The soybean crushing process produces 190 kg of soybean oil and 760 kg of soybean meal from one MT of soybeans. According to a GOJ estimate, 89 percent of soybean meal was used for feed in CY 2014, with the rest being used for soy sauce, miso, soy protein foods, and as an improving agent for processed foods.

Although Japan's compound and mixed feed production decreased by two percent in CY 2014, demand of soybean meal for feed remained unchanged in MY 2014 at 2.85 million MT because of a modest recovery of soybean meal inclusion. In CY 2014, Japan's feed manufacturers reached the limits of their ability to replace higher priced soybean meal with other lower cost protein sources, including rapeseed meal, feed wheat, and distillers dried grains with solubles (DDGS). While typical feed rations before CY 2011 contained about 14 percent soymeal, that percentage had fallen to 12 percent in CY 2014 because of a hike in its import price. Based on Post projections for livestock populations and projected consistent inclusion rates in compound feed, Post anticipates total domestic utilization of soybean meal is expected to remain relatively flat at 3,335,000 and 3,365,000 MT in MY 2014/15 and MY 2015/16 respectively.

Demand and supply of soybean meals (1,000 MT)

Demand

Supply

CY

Total

Feed

Food & Other

MY

Total

Initial Stock

Domestic

Import*2

2010

4,048

3,505

543

2009/10

4,165

111

1,866

2,091

2011

3,798

3,313

485

2010/11

3,905

117

1,602

2,183

2012

3,567

3,112

455

2011/12

3,757

107

1,489

2,250

2013

3,209

2,862

347

2012/13

3,315

111

1,453

1,729

2014

3,260*1

2,850*3

350*1

2013/14

3,366*1

106*1

1,493

1,939

Source: MAFF; *1 estimate; *2 Trade Statistics of Japan; *3 Post estimate

Soybean meal imports from India fell by 44 percent in MY 2013/14 as Indian domestic consumption increased and soybean crush fell. In response, Japan increased imports from China, South Korea, Paraguay, and the United States. Japan will have to further expand imports from alternate suppliers in MY 2014/15, as Indian exportable supplies of soybean meal are forecast lower than MY 2013/14 levels. Based on the market dynamics described above, Post projects imports will remain flat in MY 2014/15 and MY 2015/16.

Rapeseed meal and fish meal are used in feed and fertilizer production in Japan. Rapeseed crushing produces 410 kg of rapeseed oil and 570 kg of rapeseed meal for every MT of rapeseed. Post expects rapeseed meal production will remain stable in MY 2014/15 at 1.36 million MT, due to scant prospects for expanding feed production or for increasing rapeseed meal inclusion rates. Post expects this trend to continue in MY 2015/16.

Demand and supply of rapeseed meals (1,000 MT)

Demand

Supply

CY

Total

Feed

Fertilizer and other

Total

Initial Stocks

Domestic

Import MY

2010

1,300

1,032

268

1,361

55

1,267

58

2011

1,298

1,022

274

1,323

61

1,234

25

2012

1,390

1,139

246

1,447

85

1,326

14

2013

1,402

1,197

205

1,467

57

1,342

75

2014

1,392*

1,182*

210*

1,460*

65*

1,361

76

Source: MAFF; * estimate

Fish meal is primarily used as an ingredient in feed for aquaculture and livestock, while a small amount is utilized for fertilizer. Ninety percent of fish meal produced in Japan is derived from "fish residue" (essentially the unsaleable portions of fish prepared for direct consumption); the remaining ten percent is produced from whole raw fish. Domestic fish residue volumes have been decreasing as the fishery processing industry has continued to move offshore from Japan. Fish meal consumption and imports are projected to be relatively flat in MY 2014/15 and MY 2015/16.

There is no tariff on soybean meal, rapeseed meal, or fishmeal.

Production, Supply and Demand Data Statistics:

Meal, Soybean

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2016

Japan

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

1,940

1,969

1,970

1,970

0

1,970

Extr. Rate, 999.9999

1

1

1

1

0

1

Beginning Stocks

71

71

91

203

0

308

Production

1,465

1,493

1,491

1,490

0

1,490

MY Imports

1,976

1,939

2,000

1,950

0

1,950

MY Imp. from U.S.

230

228

250

250

0

250

MY Imp. from EU

0

1

0

0

0

0

Total Supply

3,512

3,503

3,582

3,643

0

3,748

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

345

259

350

260

0

260

Food Use Dom. Cons.

130

125

130

125

0

125

Feed Waste Dom. Cons.

2,946

2,916

3,020

2,950

0

2,980

Total Dom. Cons.

3,421

3,300

3,500

3,335

0

3,365

Ending Stocks

91

203

82

308

0

383

Total Distribution

3,512

3,503

3,582

3,643

0

3,748

1000 MT, PERCENT

Meal, Rapeseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Japan

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

2,370

2,400

2,450

2,450

0

2,450

Extr. Rate, 999.9999

1

1

1

1

0

1

Beginning Stocks

0

0

0

20

0

38

Production

1,330

1,353

1,370

1,360

0

1,360

MY Imports

76

76

100

75

0

75

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

1,406

1,429

1,470

1,455

0

1,473

MY Exports

2

3

2

2

0

2

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

310

249

310

250

0

250

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

1,094

1,157

1,158

1,165

0

1,165

Total Dom. Cons.

1,404

1,406

1,468

1,415

0

1,415

Ending Stocks

0

20

0

38

0

56

Total Distribution

1,406

1,429

1,470

1,455

0

1,473

1000 MT, PERCENT

Meal, Fish

2013/2014

2014/2015

2015/2016

Market Begin Year

Jan 2014

Jan 2014

Jan 2015

Japan

USDA Official

New post

USDA Official

New post

USDA Official

New post

Catch For Reduction

860

860

860

860

0

860

Beginning Stocks

9

9

16

43

0

58

Production

175

187

175

185

0

185

MY Imports

254

254

240

240

0

240

MY Imp. from U.S.

16

160

5

10

0

10

MY Imp. from EU

1

3

0

0

0

0

Total Supply

438

450

431

468

0

483

MY Exports

2

3

5

5

0

5

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

50

50

50

50

0

50

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

370

354

360

355

0

355

Total Dom. Cons.

420

404

410

405

0

405

Ending Stocks

16

43

16

58

0

73

Total Distribution

438

450

431

468

0

483

1000 MT, PERCENT

CY: Calendar Year

JFY: Japanese Fiscal Year (April – March next year)

MY: Market Year for oilseeds, meal made from oilseeds, oil: October – September next year

MY for fish meal: January – December

Conversion Ratio: Oil : Meal (weight basis)

- Soybean: 0.1975 : 0.7563

- Rapeseed: 0.4388 : 0.5551