Daisuke Matsumoto
Beef imports in Japan are showing stable increase after the Japanese government eased import restrictions on American beef in February, but beef importers are controlling shipments in June in order to avoid the government from taking safeguard measures in August.
Many predict, however, that the imports are likely to increase again in July, leading to intensifying competition between imported beef and domestic beef in the Japanese market.
The Finance Ministry reported on Thursday, June 27, that beef imports in May increased 32% from a year before to 55,557 tons, with frozen beef imports rising 42% to 32,951 tons and chilled beef imports up 19% to 22,607 tons.
The volume of frozen beef imports in April and May totaled 57,780 tons, up 33% from the same period last year, as beef imports from the United States doubled after the government accepted U.S. beef from cattle up to 30 months old, a change from a 20-month limit in place since 2006. This leaves only roughly 25,000 tons to reach the trigger level for the first quarter (April to June) of the fiscal year. If the trigger level is exceeded in June, the government will take safeguard measures to increase the beef tariff from 38.5% to 50% starting in August, and the snapback tariff will continue for the rest of the financial year.
The safeguard mechanism, aimed at protecting domestic cattle breeders, gives Japan the option to increase the beef tariff once the quarterly import volume for each of the frozen and chilled beef exceeds the trigger levels. Higher tariffs will be imposed starting two months after the quarter until the end of the fiscal year.
The safeguard figure for frozen beef is calculated to be 17% higher than imports of the same period of the previous year, which is 83,267 tons for the first quarter of this year. As for fresh and chilled beef, considering that beef imports plummeted after Japan banned imports from the U.S. in December 2003, the Japanese government introduced a special measure in 2006 to calculate trigger levels to be 17% higher than the average of the same periods in fiscal 2002 and 2003 – the years before the ban – instead of the previous year. The safeguard figure is 74,339 tons for the first quarter, which is considerably higher than the actual import volume.
Importers are all moving to avert higher tariffs by keeping the clearance volume lower than the quarterly trigger level. A major importer in Tokyo said importers are storing beef imported in June at ports without clearing customs to control the import volume. The Agriculture and Livestock Industries Corporation predicts the imports of frozen beef in June will decline 19% from a year before to 23,000 tons, saying that the safeguard measures can be avoided.
However, a major meat trader in Tokyo stated that beef imports will inevitably increase in July, as importers will take the stored beef to the customs clearance. In addition, U.S. beef production is likely to rise, making U.S. beef easier to import during summer when demand for beef increases, the trader said.
(June 28, 2013)