Japan. Barley Annual. Mar 2015 四月 9, 2015

PS&D

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

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

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)

Source: MAFF

*April 2014- March 4, 2015

Feed Barley Imports

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)

Source: MAFF

*As of March 4, 2015

Food Barley Imports

Source: Japan Ministry of Finance

Barley Imports Total

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.