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The native Wagyu breed dominates in Japanese farms followed by the so-called “mixed breeds” and the Holstein Frisian cattle.

Japan is not self-sufficient in terms of beef and beef products. Domestic production is about 470 thousand tons a year, and the demand reaches 1 million 320 thousand tons, meaning that Japan imports about 850 thousand tons of beef and beef products each year.

Exports from Poland

Japan allows Polish exports of beef and offal from cattle under 30 months of age. Despite the Economic Partnership  Agreement between the European Union and Japan, the export of such product is carried out according to the documentation agreed bilaterally between Polish and Japanese veterinary authorities.

Each entity exporting the beef to Japan must meet the requirements specified in the Export Verification Programme (EVP).

As of 30.11.2020, 28 entities, including 19 slaughtering plants, have been authorized for export of beef and beef products to Japan.

Tariffs

As a result of the Economic Partnership  Agreement between the European Union and Japan the tariffs are as follows:

Table 1 – tariffs for the EU countries

*Withing 15 years of becoming effective, that is in 2034

Tariff code0202
General tariff38,5
Current tariff25,8%
Target tariff*9%

Export volume1

Due to the distance between Europe and Japan, the EU countries, including Poland, do not specialize in exporting fresh beef (CN 0201), focusing on frozen meat and offal.

Mainly frozen beef (CN 0202) is exported from the EU to Japan. The export volume from the EU in 2017-2019 is shown the table below (in tons):

Table 2 – Exports from the EU countries (CN 0202)

Country201720182019
Austria1910
Denmark511250
France29413
Ireland6674813
Italy373746
Netherlands744127
Poland8436412 491
EU – total1 1008283 459
Country201720182019
Poland628823856
Ireland1 1937661 507
Italy154198348
Netherlands351296350
Austria73220
Denmark16996151
France1184556
EU – total2 7152 2962 296

Poland is absolutely the largest exporter of frozen beef among the EU countries, accounting for more than 70% of the export volume to Japan. In this period, Japanese market was at the 20th, 21st and  7th place in terms of the export volume.

Japan also imports beef offal. The export of these products (CN 020610, CN 020621-29) in 2017-2019 (in tons) is presented in the table below:

 

Table 3 – Exports from the EU countries (CN 020610, CN 020521-29)

As we can see, in terms of volume, the exports of offal to Japan in 2017-2019 was larger than export of beef. In case of Poland, the frozen beef (CN 0202) is the main export product with a significant volume increase in  2019.

According to the USDA FAS[2] forecast, after a slight beef consumption decrease in Japan (by 2%) in 2019, the consumption was to grow by 1,3%  to 1 336 thousand tons. Unfortunately, due to the cancellation of Olympics in Tokyo and closing off restaurants and other service outlets (accounting for 60% of beef consumption in Japan) as a result of COVID-19 pandemic, a slight decrease of beef consumption is foreseen in 2020 (a sharp decrease in the first half of the year and a slight increase in the second half of 2020)[3]. Due to untypical situation, 2020 cannot be a reference and does not depict actual economic trends.

In the context of trade, the statistical data for the first half of 2020 is optimistic – the beef imports were at high level and grew by 5% year-to-year. The largest growth was observed in the EU – by 602%[4].

According to the US Department of Agriculture4, the beef imports to Japan will be stable in 2021 and will amount to about 855 thousand tons. This is caused by a steady demand for beef at moderate prices and the need to keep adequate stock to avoid price turmoil on the market.

The fact that the domestic production accounts for only slightly more than 1/3 of the demand, Japan is an attractive export direction for Polish beef exporters. Thanks to care for quality and adaptation of the product offer, Polish beef can fit the tastes of Japanese consumers. Despite the differences in the business culture which make the negotiations very long, Japanese customers are faithful and loyal to their suppliers and long-term contracts are concluded which compensates for the extensive business negotiations in the initial phase.

In addition, Polish exporters can find an opportunity in the turmoil caused by severed supply chains, e.g. from the USA as a result of COVID-19, which can be a stimulus for Japanese importers to diversify the beef suppliers.



1 European Commission statistical data: www.madb.europa.eu
2 GAIN USDA Report: Livestock and Products Semi-annual, publication date: 28.02.2020
3 GAIN USDA Report: Livestock and Products Annual, publication date: 14.08.2020
4 EC Beef Trade Data: www.agridata.ec.europa.eu