PS&D

Corn

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

1

1

1

1

0

1

Beginning Stocks

523

523

545

492

0

493

Production

1

1

1

1

0

1

MY Imports

15,121

15,118

15,400

15,400

0

15,200

TY Imports

15,121

15,118

15,400

15,400

0

15,200

TY Imp. from U.S.

12,337

11,016

0

0

0

0

Total Supply

15,645

15,642

15,946

15,893

0

15,694

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

10,600

10,000

10,900

10,200

0

10,200

FSI Consumption

4,500

5,150

4,500

5,200

0

5,000

Total Consumption

15,100

15,150

15,400

15,400

0

15,200

Ending Stocks

545

492

546

493

0

694

Total Distribution

15,645

15,642

15,946

15,893

0

15,894

Yield

1.0000

1.0000

1.0000

1.0000

0.0000

1.0000

TS=TD

0

0

0

0

0

200

Production

Corn production is negligible in Japan.

Japan's Livestock Population in Gradual Decline

Of the total demand for corn in Japan, roughly 70 percent comes from the feed sector, and 30 percent comes from the food sector, mainly from starch manufacturers. Despite the decline in utilization over recent years, corn continues to be the largest ingredient in compound feed. Of the total demand for feed corn, about 44 percent is for the poultry sector. As shown in the table below, the stagnant trend in the livestock population is expected to continue, leading to a corresponding decline in feed demand in the years to come.

Japan's Livestock and Poultry Population (As of February each year, Unit: 1,000 heads)

2000

2010

2011

2012

2013

2014

***2015

Dairy cows

1,764

1,484

1,467

1,449

1,423

1,395

1,380

Beef cattle

2,824

2,892

2,763

2,723

2,642

2,567

2,515

Swine

9,806

9,750

9,768

9,735

9,685

9,537

9,520

Layers*

140,365

139,200

137,352

135,477

135,000

133,506

133,500

Broilers

108,410

NA

NA

NA

**131,600

135,747

135,750

*Layers do not include chicks on feed

**MAFF resumed its official survey in 2013. However, the results cannot be compared to the previous survey due to changes in survey method.

**FAS/Tokyo forecast

Lower Price Leads to Increased Corn Utilization

The feed ingredient ratio is adjusted from year to year, depending on the price of various grains. The corn utilization ratio of about 50 percent, pre-2008 price surge, was gradually lowered to 43 percent in JFY2012 and JFY2013. Given that total feed production in Japan is approximately 24 million MT, a decline of 7 percent in utilization translates to a 1.68 million MT reduction per year in corn demand. As the price for the 2013 new crop of U.S. corn declined, feed millers raised the utilization ratio of corn to 45 percent in MY2013/14. If corn continues to be price competitively compared to other feed ingredients in MY2014/15, a further increase in feed demand is expected. However, as mentioned in the Wheat section, Japanese feed millers have become more flexible in adjusting the composition of feed ingredients and are willing to use the most price competitive ingredients. In addition, there is a concerted effort by MAFF to increase the use of feed quality rice. Therefore, the utilization of corn in MY2014/15 is expected to increase marginally. For MY2015/16, although livestock numbers are expected to decline, leading to a slight decrease in national feed production, and rice use in feed is expected to increase, Post estimates corn utilization in feed will remain unchanged from MY2014/15 as long as the price of corn is attractive than other ingredients.

The driving force in food corn demand comes from the beverage sector, particularly for high fructose corn syrup (HFCS) used in low alcoholic drinks like happoshu (light beer) and soft drinks. HFCS production reached a record high in Marketing Year (MY) 2012/13 (October – September) but declined 1.7 percent in MY 2013/14, while demand for corn to manufacture chemically modified starch was strong due to its price competitiveness over other imported starches. Thus the overall demand for food corn increased in MY2013/14. For MY2014/15, MAFF forecasts demand for HFCS will decline 1.1 percent from the previous year, but demand for chemically modified starch will increase 5.6 percent. Accordingly, Post forecasts a slight increase in demand for food corn for MY2014/15, and a slight decrease in MY2015/16 as demand for chemically modified starch normalizes. Post forecasts total corn consumption for MY2014/15 will increase slightly, to 15.4 million MT, but will decrease for the aforementioned reasons in MY2015/16 to 15.2 million MT.

Prices

The CIF price of U.S. corn during MY2013/14 fell 27.7 percent over MY2012/13. The 2015 new crop is currently marketed at prices lower than MY2014.

CIF Price of Feed Corn

MY: October - September

Unit Value(United States Dollars)

% Change

Partner Country

Unit

2011/12

2012/13

2013/14

MY2014 /MY2013

World

MT

337.31

341.97

261.91

- 23.41

United States

MT

340.42

366.39

264.83

- 27.72

Brazil

MT

350.87

333.71

261.13

- 21.75

Ukraine

MT

309.42

312.06

234.78

- 24.76

Argentina

MT

333.77

323.79

304.97

- 5.81

South Africa

MT

369.41

322.48

285.46

- 11.48

Romania

MT

314.29

0

227.37

0.00

Russia

MT

0

0

285.35

0.00

France

MT

0

363.64

381.41

4.89

India

MT

0

323.19

268.24

- 17.00

Paraguay

MT

0

0

239.11

0.00

Source: Japan Ministry of Finance

CIF Price of Feed Corn in Recent Months

Japan Import Statistics

Commodity: Grain: Corn for Feed,

Monthly Series: 10/2014 - 01/2015

Partner Country

Unit

Unit Value (United States Dollars)

10/2014

11/2014

12/2014

01/2015

World

MT

242.03

220.11

222.7

230.06

United States

MT

242.88

218.55

222.27

232.48

Ukraine

MT

0

0

226.79

228.72

Brazil

MT

225.25

218.66

223.01

227.06

South Africa

MT

221.71

232.17

224.07

226.66

Argentina

MT

308.67

270.86

278.77

226.42

Romania

MT

0

212.03

214.63

217.83

Source: Japan Ministry of Finance

Trade

Although the price of feed corn in MY2013/14 declined 23 percent over MY2012/13, Japanese feed corn imports in MY2013/14 decreased further from MY2012/13. Feed corn imports from the United States showed a significant recovery, up 88 percent in MY2013/14 from the previous year, but were still far from the pre-2012 drought level, when U.S. corn accounted for over 90 percent of Japanese feed corn imports. Since MY 2011/12, imports from Brazil, Argentina, South Africa and the Ukraine have notably increased. Post expects that, due to a marginal increase in utilization of corn in feed and an increase in demand for food corn in MY2014/15, total corn imports will increase slightly, to 15.4 million MT. For MY2015/16, feed corn demand is expected to remain unchanged but food corn demand is expected to decrease, total corn imports are forecast to decrease slightly, to 15.2 million MT.

Feed Corn Imports (Annual)

MY: October - September

Partner Country

Unit

Quantity

% Share

% Change

2011/12

2012/13

2013/14

2011/12

2012/13

2013/14

MY2014 /MY2013

World

MT

10677607

10142727

9970982

100.00

100.00

100.00

- 1.69

United States

MT

8035925

3437660

6455367

75.26

33.89

64.74

87.78

Brazil

MT

768443

4223464

1907778

7.20

41.64

19.13

- 54.83

Ukraine

MT

911658

349626

1087909

8.54

3.45

10.91

211.16

Argentina

MT

575346

1637493

287329

5.39

16.14

2.88

- 82.45

South Africa

MT

10276

474674

125530

0.10

4.68

1.26

- 73.55

Romania

MT

147837

0

97704

1.38

0.00

0.98

0.00

Russia

MT

0

0

8923

0.00

0.00

0.09

0.00

India

MT

0

168

189

0.00

0.00

0.00

12.50

France

MT

0

8012

142

0.00

0.08

0.00

- 98.23

Paraguay

MT

0

0

111

0.00

0.00

0.00

0.00

Hungary

MT

70800

0

0

0.66

0.00

0.00

0.00

Australia

MT

7411

1523

0

0.07

0.02

0.00

- 100.00

Bulgaria

MT

38235

0

0

0.36

0.00

0.00

0.00

Serbia

MT

103579

0

0

0.97

0.00

0.00

0.00

Slovakia

MT

8097

0

0

0.08

0.00

0.00

0.00

Thailand

MT

0

10107

0

0.00

0.10

0.00

- 100.00

Feed Corn Imports (Monthly)

Quantity

Partner Country

Unit

10/2014

11/2014

12/2014

01/2015

Total

*Change

World

MT

807133

772702

895480

774718

3250033

-11.0%

United States

MT

750571

623319

542559

418517

2334966

100.6%

Brazil

MT

39317

85773

279872

260050

665012

-55.7%

Ukraine

MT

0

0

31553

71608

103161

-80.6%

Argentina

MT

4318

11138

500

9555

25511

-90.5%

South Africa

MT

12927

47434

33453

9000

102814

16.3%

Romania

MT

0

5038

7543

5988

18569

-81.0%

Source: Japan Ministry of Finance

*Change from the same period previous year

Food Corn Imports (Annual)

MY: October - September

Partner Country

Unit

Quantity

% Share

% Change

2011/12

2012/13

2013/14

2011/12

2012/13

2013/14

MY2014 /MY2013

World

MT

4207862

4266864

5147313

100.00

100.00

100.00

20.63

United States

MT

4043347

3494718

4560599

96.09

81.90

88.60

30.50

Brazil

MT

74915

397626

287462

1.78

9.32

5.58

- 27.71

Ukraine

MT

49095

1900

131838

1.17

0.04

2.56

6838.84

South Africa

MT

0

142892

46340

0.00

3.35

0.90

- 67.57

Russia

MT

0

0

40832

0.00

0.00

0.79

0.00

Australia

MT

15790

29001

35087

0.38

0.68

0.68

20.99

France

MT

82

72612

21130

0.00

1.70

0.41

- 70.90

Argentina

MT

10750

118991

13821

0.26

2.79

0.27

- 88.38

India

MT

4363

4315

5486

0.10

0.10

0.11

27.14

Other

MT

9520

4809

4718

0

0

0

-0.02

Source: Japan Ministry of Finance

Food Corn Imports (Monthly)

Partner Country

Unit

Quantity

*Change

10/2014

11/2014

12/2014

01/2015

Total

World

MT

416547

443843

366568

434679

1661637

15.3%

United States

MT

372785

430722

339047

373887

1516441

47.3%

Brazil

MT

20003

0

15931

48213

84147

-60.0%

Ukraine

MT

0

0

0

11500

11500

-88.7%

India

MT

336

154

135

671

1296

-43.8%

Peru

MT

4

201

173

224

602

5.1%

Indonesia

MT

213

340

362

127

1042

227.7%

South Africa

MT

16171

12354

0

26

28551

4.7%

Argentina

MT

7000

41

10881

21

17943

29.8%

Other

MT

35

31

39

10

115

-99.8%

Source: Japan Ministry of Finance

*Change from the same period previous year

Corn Imports Total (Annual)

MY: October - September

Partner Country

Unit

Quantity

% Share

% Change

2011/12

2012/13

2013/14

2011/12

2012/13

2013/14

MY2014 /MY2013

World

MT

14885469

14409591

15118295

100.00

100.00

100.00

4.92

United States

MT

12079272

6932378

11015966

81.15

48.11

72.87

58.91

Brazil

MT

843358

4621090

2195240

5.67

32.07

14.52

- 52.50

Ukraine

MT

960753

351526

1219747

6.45

2.44

8.07

246.99

Argentina

MT

586096

1756484

301150

3.94

12.19

1.99

- 82.85

South Africa

MT

10276

617566

171870

0.07

4.29

1.14

- 72.17

Romania

MT

147837

0

98405

0.99

0.00

0.65

0.00

Russia

MT

0

0

49755

0.00

0.00

0.33

0.00

Australia

MT

23201

30524

35087

0.16

0.21

0.23

14.95

France

MT

82

80624

21272

0.00

0.56

0.14

- 73.62

India

MT

4363

4483

5675

0.03

0.03

0.04

26.59

Other

MT

230231

14916

4128

0

0

0

-0.72

Source: Japan Ministry of Finance

Corn Imports Total (Monthly)

Partner Country

Unit

Quantity

*Change

10/2014

11/2014

12/2014

01/2015

Total

World

MT

1223680

1216545

1262048

1209397

4911670

-3.6%

United States

MT

1123356

1054041

881606

792404

3851407

75.6%

Brazil

MT

59320

85773

295803

308263

749159

-56.2%

Ukraine

MT

0

0

31553

83108

114661

-81.9%

Argentina

MT

11318

11179

11381

9576

43454

-84.6%

South Africa

MT

29098

59788

33453

9026

131365

13.6%

Romania

MT

0

5038

7543

5988

18569

-81.1%

Other

MT

588

726

709

1032

3055

-94.8%

Source: Japan Ministry of Finance

*Change from the same period previous year

Stocks

Japan holds emergency stocks of essential feed grains, i.e. corn and sorghum. The stock level is set at 1.25 million MT (600,000 MT held by the government and 650,000 MT held by the private sector) for JFY 2014 and JFY 2015. According to MAFF, the majority of these stocks are corn.

DDGS Imports Leap to a Record High Level

One of the positive side-effects of the ethanol boom in the United States is the increasing availability of a high value byproduct, Distiller's Dried Grains with Solubles (DDGS). Japan's imports of DDGS from the United Sates have been increasing significantly and surged further in MY2013/14, because the price was reasonable for its nutrient value in comparison to other feed ingredients such as corn and soy meal. Nearly 60 percent of these DDGS are used in layer feed. Although its utilization is still contingent upon the price of other feed grains, its demand remains unchanged in MY2014/15, with imports keeping up with the pace of the previous year.