Rice: Trade Mission to Japan Points to Market Opportunities

Rice field. ©Debra L Ferguson Stock Photography

Last week’s trade mission to Japan, with approximately 100 participants, was the largest in USDA history.

Designed to reach new contacts and potential customers for U.S. agricultural products in Tokyo and Osaka, Japan’s two largest cities and culinary centers,  the mission was let by Ted McKinney, Under Sec. of Agriculture for Trade and Ag Affairs.

The group heard a presentation on current food trends in Japan, and Jim Guinn,  USA Rice Asia Promotion Programs Director, met with USDA staff prior to visits with trade associations and rice importers, including a formal conversation with Under Secretary McKinney and Office of Agricultural Affairs staff here.

“Japan is already a top market for U.S. farm and food products, but there are many new opportunities still waiting to be tapped there,” McKinney said.  “Japan is an import-dependent economy and its 130 million consumers have a real affinity for U.S. food products because of their quality, affordability, and safety.”

Meetings with traders, industry leaders, and politicians, pointed up two differing opinions on where rice production in Japan is headed and how it will affect imports.

Representing one side was the president of a food industry association who cited a recent Ministry of Finance study that concluded that within 10 years, Japan’s rice production would fall from the current 7.3 million tons to 5 million tons due to farmer retirement, small plot abandonment, and competing cash crops, resulting in the need to import up to 1.4 million tons of rice.

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A differing opinion was offered by a rice industry group who argued that government policies/subsidies aimed at consolidating small plots into larger farming units would ameliorate any loss in the number of farmers.  Coupled with a falling population and the continued trend of reduced per capita consumption of rice, the industry group surmised demand would be significantly less 10 years hence, allowing Japan to remain self-sufficient in rice production.

Actual market data shows rice importers and distributors for the foodservice industry have a sustained strong interest in U.S. rice, although there is increasing competition from Australian short grain rice that is priced on par with or marginally lower than U.S. Calrose medium grain.

“There are two types of foodservice end users currently using imported U.S. rice,” said Guinn.  “Those who decide to purchase based solely on the lower price of imported rice and another group who appreciate the versatility and end use characteristics of U.S. medium grain.  Indications are the larger and growing segment is the latter group.”

Japan continues to be the second largest single export market for U.S. milled rice at more than 300,000 MT, and the second most important export market in terms of value, nearly $200 million.

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