Japanese rice market affected by trade pacts

Rice

Japan’s conclusion of a free trade agreement with the European Union and efforts to conclude the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) are expected to increase market competition for U.S. rice exports to Japan, according to a July 6 Global Agricultural Information Network (GAIN) report from the U.S. Department of Agriculture.

The Japan-E.U. agreement could go into effect as early as 2019, while CPTPP Member States are currently undertaking domestic procedures to ratify the agreement, the USDA said.

Traditionally, the United States has been a major supplier of rice to Japan. In 2017, Japan imported roughly $552 million in rice and rice products, of which 45.4% (approximately $251 million) was from the United States, the report said.

In 2017, Japan was the United States’ third largest export market for rice.

In the agreement with the E.U., Japan agreed to eliminate or reduce duties for 16 tariff lines covering rice-containing products of which Japan imports negligible volumes or for which duties were already low.

As part of the CPTPP agreement, which includes 10 other countries but not the United States, Japan reduced duties for 13 tariff lines covering rice flour preparations, rice cake and rice crackers.

“While Japanese per-capita rice consumption continues to decline, rice remains a staple food for the Japanese diet and the only grain where domestic production levels are sufficient to meet rice consumption needs,” the USDA said.