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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed

29 October 2013

USDA GAIN: Japan Grain and Feed Update - October 2013USDA GAIN: Japan Grain and Feed Update - October 2013

Wheat imports from the United States for MY2012/13 declined 3 percent due to an increased supply of Canadian spring wheat, which is cheaper than its U.S. counterpart. Despite the two-month-long trade disruption caused by the discovery of GE wheat volunteers in an Oregon field (see JA3032), import tendering has returned to normal. Japan’s rice crop this season is forecast to be 2 percent above average historical yield.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Overall Market Situation

Up-to-date feed production statistics and a detailed breakdown of feed ingredient utilization ratios follow. Since the beginning of the Japan Fiscal Year (JFY), in April 2013, utilization of corn has been at 42.0 percent, continuing the slight downward trend of the past decade. Instead, the use of sorghum has increased. The utilization ratio of wheat is slightly lower than the 2012 average but remains strong at 3.5-3.7 percent, significantly higher than the average of the previous decade.

Japan has a feed price stabilization program, whereby the combination of a subsidy by the Ministry of Agriculture, Forestry and Fisheries (MAFF) and an industry fund helps absorb sudden surges in the compound feed price. It is activated when the import costs of ingredients in a particular quarter exceed the average import costs of ingredients in the previous one year. As the graph below shows, since the significant grain price hike in the 3rd quarter of 2012, the subsidy has been re-activated and absorbed a large portion of the cost increase. However, even with the subsidy, the Farmer’s Purchase Price for compound feed is the highest on record.

Wheat Updates

The import statistics for MY2012/13 (ending June 2013) are summarized below. Of particular note, due to favorable weather conditions in the last couple of years, supply of price-competitive Canadian spring wheat has increased and taken a share from U.S. Dark Northern Spring.

Post has updated PS&D based on these import statistics.

GE Wheat Updates

Since the successful resumption of import tenders for Western White wheat on August 1, 2013 (see JA3032), import tenders have been held regularly without disruption. The following table shows a summary of import tenders for MAFF’s direct purchase of food wheat in August and September. Because Western White was excluded from the tenders for two months, MAFF purchased three months worth of Western White in August. The September tender returned to an ordinary pattern. By mid September, MAFF completed testing of all Western White stocks, 170,000 metric tons in total, which MAFF had held since the GE wheat incident occurred in late May. Following no positive detection of the GE trait in question, MAFF completed sale of all the stocks by the end of September.

Rice Updates

According to MAFF’s forecast issued on September 27, as of September 15, Japan’s rice crop index is above an average year at 102. This translates to a harvest of 8,245,000 MT of table rice on a brown rice basis. MAFF will publish the final crop index in December.

October 2013

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