PS&D

Barley

2013/14

2014/15

2015/16

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Japan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

59

59

60

60

0

60

Beginning Stocks

367

367

343

393

0

413

Production

182

182

170

170

0

170

MY Imports

1,294

1,294

1,300

1,300

0

1,300

TY Imports

1,294

1,294

1,300

1,300

0

1,300

TY Imp. from U.S.

165

183

0

0

0

0

Total Supply

1,843

1,843

1,813

1,863

0

1,883

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

1,200

1,100

1,200

1,100

0

1,100

FSI Consumption

300

350

300

350

0

350

Total Consumption

1,500

1,450

1,500

1,450

0

1,450

Ending Stocks

343

393

313

413

0

433

Total Distribution

1,843

1,843

1,813

1,863

0

1,883

Yield

3.0847

3.0847

2.8333

2.8333

0.0000

2.8333

TS=TD

0

0

0

0

0

0

Production

Aggregate barley production in Japan in 2014 decreased 7.3 percent from 2013, to 169,500 MT. Planted area for both two-row and six-row barley increased marginally. However, the production volume decreased by 7.0 percent and 9.0 percent respectively from the previous year's level, as rain during harvest in some of the major growing areas resulted in lower yield. Naked barley production increased slightly over the previous year, as a 5.0 percent increase in planted area overcame a 4.0 percent decrease in yield due to rain at germination and cold temperatures during the growing season. For 2015, Post forecasts that crop area will remain at the 2014 level. Assuming average yield, 2015 production volume is expected to remain flat, at 170,000 MT.

Japan's Barley Production

Type of Barley

Productio n

2010

2011

2012

2013

*2014

**2015

Two- Row Barley

Crop Area (hectares)

36,600

37,600

38,300

37,500

37,600

37,520

Production Volume (MT)

104,300

119,100

112,400

116,600

107,900

111,900

Yield (MT/hectare)

2.85

3.17

2.93

3.11

2.86

2.98

Six-Row Barley

Crop Area (hectares)

17,400

17,400

17,100

16,900

17,300

17,220

Production Volume (MT)

44,800

38,700

47,800

51,500

46,800

46,000

Yield (MT/hectare)

2.57

2.22

2.80

3.05

2.71

2.67

Naked Barley

Crop Area (hectares)

4,720

5,130

4,970

5,010

5,250

5,010

Production Volume (MT)

11,800

13,700

12,200

14,700

14,800

13,400

Yield (MT/hectare)

2.50

2.67

2.45

2.93

2.82

2.68

Barley Total

Crop Area (hectares)

58,720

60,130

60,370

59,410

60,150

60,000

Production Volume (MT)

160,900

171,500

172,400

182,800

169,500

170,000

Source: MAFF

*Preliminary

**FAS/Tokyo forecast

Consumption

Aggregate consumption of barley (feed and food) is estimated to be stable, at approximately 1.5 million MT. Roughly 80 percent of barley is consumed in the feed sector, especially compound and mixed feed for the cattle industry (beef and dairy). It is particularly important in feeding beef cattle, because it contributes to the production of high quality beef with the white marbling that Japanese consumers favor. The largest non-feed uses are for the production of shochu, a traditional distilled liquor, and beer. Other uses include miso (soybean paste) and barley tea. There is little indication that either feed or food demand will increase in the near future. In the long term, some decline in feed demand is expected as Japan's cattle population, dairy in particular, shrinks.

Prices

Along with the prices of other major feed grains, barley prices also declined in MY2013/14.

The price of U.S. barley dropped significantly, becoming price-competitive against competitors.

CIF Price of Barley for Feed

MY: October - September

Partner Country

Unit

Unit Value(United States Dollars)

% Change

2011/12

2012/13

2013/14

2014/2013

World

MT

300.95

326.12

276.79

- 15.12

Australia

MT

298.39

325.7

278.71

- 14.43

Canada

MT

308.45

326.09

271.05

- 16.88

United States

MT

342.48

338.74

273.3

- 19.32

Russia

MT

310.84

0

291.51

0.00

Ukraine

MT

0

299.8

300.58

0.26

Source: Japan Ministry of Finance

Trade

Along with rice and wheat, barley imports are controlled by MAFF as a "Staple Food." MAFF has been hesitant to remove barley from the state trading system entirely, because it is a strategic alternative crop under the rice crop diversion program.

MAFF introduced the SBS system for barley for feed in JFY 1999, with approximately 360,000 MT contracted under three tenders. The allocation amount has been greatly raised since then, and was set at 1.28 million MT for JFY 2014, which ends in March 2015. Bidding is held almost weekly, to allow for more commercially viable trade. As of March 4, 2015, forty-two tenders had been held in JFY2014, through which 909,977 MT were contracted as summarized below.

As mentioned in the Wheat section, as a result of the implementation of the Japan-Australia Economic Partnership Agreement on January 15, 2015, imports of Australian feed wheat and feed barley have been liberalized so that companies can now import directly without utilizing the SBS system.

SBS Imports of Feed Barley (Unit: MT)

JFY2012

JFY2013

JFY2014

MAFF allocation

1,288,000

1,288,000

1,288,000

Volume contracted

1,051,630

995,805

909,977*

Source: MAFF

*April 2014- March 4, 2015

Feed Barley Imports

MY: October-September

Partner Country

Unit

Quantity

% Share

% Change

2011/12

2012/13

2013/14

2011/12

2012/13

2013/14

MY2014

MY/2013

World

MT

1045071

1122019

1052245

100.00

100.00

100.00

- 6.22

Australia

MT

795689

599259

537944

76.14

53.41

51.12

- 10.23

Canada

MT

224433

439971

275057

21.48

39.21

26.14

- 37.48

United States

MT

3215

62584

177671

0.31

5.58

16.88

183.89

Russia

MT

21734

0

32300

2.08

0.00

3.07

0.00

Ukraine

MT

0

20205

29273

0.00

1.80

2.78

44.88

Source: Japan Ministry of Finance

Approximately 207,000 MT of food barley was imported in JFY 2013: 70 percent from Australia for shochu and beer; and 28 percent from Canada for beer and barley tea. Imports from the United States are used primarily for beer. As of March 4, 2015, MAFF has held twelve tenders in JFY 2014, contracting for approximately 195,000 MT.

As with wheat, the SBS system for food barley has two categories: Category I is for vessel trade, under which most barley is imported; Category II is for container units, which provides a means for new varieties to enter the market.

Total imports from the United States peaked in 2008, at nearly 500,000 MT, but plummeted with the resurgence of Australia as the leading supplier due to its price competitiveness and proximity to Japan's major barley importing port in Kyushu. In MY2013/14, as the price competitiveness of U.S. barley improved, U.S. feed barley exports almost tripled from the previous year, taking import market share from Australia and Canada. Given that overall barley consumption, as well as Japan's domestic barley production, is expected to remain flat, imports in MY2014/15 and MY2015/16 are forecast to remain at 1.3 million MT.

SBS Imports of Food Barley - JFY2013 and JFY2015 (April 2013-March 205, Unit: MT)

Country

Category

Apr-Sept 2013

Oct-13 ~ Mar 2014

JFY2013 Total

Apr-Sept 2014

Oct-14 ~ Mar 2015*

JFY2014* Total

Australia

Category I

50,330

85,084

135,414

75,000

44,420

119,420

Category II

7,020

3,000

10,020

2,000

2,000

4,000

Australia Total

57,350

88,084

145,434

77,000

46,420

123,420

Canada

Category I

25,568

31,000

56,568

32,900

29,710

62,610

Category II

522

1,112

1,634

2,210

1,050

3,260

Canada Total

26,090

32,112

58,202

35,110

30,760

65,870

USA

Category I

0

0

0

0

0

0

Category II

925

2,303

3,228

3,115

2,103

5,218

USA Total

925

2303

3,228

3115

2103

5,218

Other

Category I

0

0

0

0

0

0

Category II

0

0

0

0

0

0

Total

84,365

122,499

206,864

115,225

79,283

194,508

Source: MAFF

*As of March 4, 2015

Food Barley Imports

MT: October - September

Partner Country

Unit

Quantity

% Share

% Change

2011/12

2012/13

2013/14

2011/12

2012/13

2013/14

MY2014

/MY2013

World

MT

211768

232317

242085

100.00

100.00

100.00

4.20

Australia

MT

163724

173668

167992

77.31

74.75

69.39

- 3.27

Canada

MT

46270

56513

68595

21.85

24.33

28.34

21.38

United States

MT

1774

2133

5491

0.84

0.92

2.27

157.43

United Kingdom

MT

0

3

5

0.00

0.00

0.00

66.67

China

MT

0

0

2

0.00

0.00

0.00

0.00

Czech Republic

MT

0

0

0

0.00

0.00

0.00

0.00

Source: Japan Ministry of Finance

Barley Imports Total

MT: October - September

Partner Country

Unit

Quantity

% Share

% Change

2011/12

2012/13

2013/14

2011/12

2012/13

2013/14

MY2014

/MY2013

World

MT

1257042

1354336

1294330

100.00

100.00

100.00

- 4.43

Australia

MT

959413

772927

705936

76.32

57.07

54.54

- 8.67

Canada

MT

270763

496484

343652

21.54

36.66

26.55

- 30.78

United States

MT

5026

64717

183162

0.40

4.78

14.15

183.02

Russia

MT

21734

0

32300

1.73

0.00

2.50

0.00

Ukraine

MT

0

20205

29273

0.00

1.49

2.26

44.88

United Kingdom

MT

0

3

5

0.00

0.00

0.00

66.67

China

MT

0

0

2

0.00

0.00

0.00

0.00

Czech Republic

MT

1

0

0

0.00

0.00

0.00

0.00

Germany

MT

105

0

0

0.01

0.00

0.00

0.00

Stocks

Japan used to hold 350,000 MT of emergency barley stocks, but since 2006, those stocks have been replaced by rice stocks. Since practically all the feed barley Japan needs can be imported through the SBS tenders with an ample allocation (1.28 million MT), MAFF determined that government-held emergency stocks were no longer necessary.