Required Report - public distribution

**Date:** 10/18/2006

**GAIN Report Number:** JA6055

JA9999

**Japan**

**Strawberries**

**Annual**

**2006**

**Approved by:**

![](media/image1.wmf)Rachel Nelson

U.S. Embassy

**Prepared by:**

Kenzo Ito

**Report Highlights:**

Japanese strawberry production is declining slowly at an annual rate of
about one to two percent due largely to labor shortages. U.S. fresh
strawberries continue to dominate Japan's confectionery market in the
summer and fall, however Japanese farmers have started producing summer
and fall-crop strawberries in northern Japan that compete with U.S.
berries. China keeps its position as the leader in Japan's frozen
strawberry market, holding approximately 68 percent of the market share.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Tokyo \[JA1\]

\[JA\]

Table of Contents

[**Japanese Strawberry Production Declines Slowly
3**](#japanese-strawberry-production-declines-slowly)

[Extra Sweet Strawberries Preferred in Japan
3](#extra-sweet-strawberries-preferred-in-japan)

[*Hokkaido* Farmer Developed Summer-Pick Strawberry
3](#hokkaido-farmer-developed-summer-pick-strawberry)

[U.S. Fresh Strawberries Sell Well During Domestic Off-Seasons
4](#u.s.-fresh-strawberries-sell-well-during-domestic-off-seasons)

[Higher Freight Costs Raise the Price of Strawberries from the United
States
5](#higher-freight-costs-raised-the-price-of-strawberries-from-the-united-states)

[Japan's Frozen Strawberry Imports Declined in 2005
5](#japans-frozen-strawberry-imports-declined-in-2005)

[High Import Duties Are Applied to Fresh and Frozen Strawberries
6](#high-import-duties-are-applied-to-fresh-and-frozen-strawberries)

[The Positive List System Became Effective on May 29, 2006
6](#the-positive-list-system-became-effective-on-may-29-2006)

[PS&D Tables and Trade Matrices 7](#psd-tables-and-trade-matrices)

[Fresh Strawberry PS&D Tables 7](#fresh-strawberry-psd-tables)

[Frozen Strawberry PS&D Table 8](#frozen-strawberry-psd-table)

[Fresh Strawberry Export Trade Matrix
9](#fresh-strawberry-export-trade-matrix)

[Fresh Strawberry Import Trade Matrix
10](#fresh-strawberry-import-trade-matrix)

[Frozen Strawberry Import Trade Matrix
11](#frozen-strawberry-import-trade-matrix)

[Fresh Strawberry Wholesale Price Table
12](#fresh-strawberry-wholesale-price-table)

# Japanese Strawberry Production Declines Slowly

![](media/image2.wmf)Fresh strawberries are one of the top selling items
in Japan's fresh produce market; however, Japanese production has been
slowly declining due largely to labor shortages. Strawberry production,
especially harvesting and packaging processes, requires intense manual
labor. Post does not anticipate an improvement in the labor situation
for Japan's strawberry producers and so expects the nation's output will
continue to decline at a rate of about 1 to 2 percent annually.

Japan produced 196,200 metric tons of fresh strawberries in the 2004
season (from October 2004 to September 2005), down approximately one
percent from the previous season, according to the Ministry of
Agriculture, Forestry and Fisheries (MAFF). The area planted to
strawberries declined approximately 2 percent to 6,880 hectares in the
2004 season, due largely to a shortage of labor in the major production
regions.

Japanese strawberries are largely produced on the Pacific Coast of
*Honshu* (Japan's main island) and *Kyushu* (Japan's south most islands)
where the weather is relatively mild. A great deal of strawberries are
cultivated in green houses in Japan, with harvesting occurring from
December through May. The majority of domestic strawberries are consumed
fresh with less than one percent destined for processing, according to a
MAFF survey. Post estimates that approximately 1,000 metric tons go to
the food-processing sector annually, of which roughly 700 metric tons
are frozen for further processing.

# Extra Sweet Strawberries Preferred in Japan

Lately, extra sweet type bananas have sold extremely well in Japan;
particularly among younger generations. The Japanese strawberry industry
learned a lesson from this success and have switched their crops to
extra sweet varieties. For example, the *Nyoho* strawberry, which was
commonly cultivated in the eastern Japan, has now been succeeded by a
more sweet variety called "*Tochiotome.*" The *Tochiotome* variety
produces large berries (a berry weighs about 15 grams), very little
acid, and very sweet flavor. It also has a long shelf life. In the
western Japan, *Toyonoka* strawberries have been very successful;
however an extra sweet type called "*Amao*" is quickly replacing the
*Toyonoka variety*, reflecting consumer preference for even sweeter
berries. *Amao* is a large strawberry, which often reaches up to 40
grams per fruit, and is used as a gift item. The Brix level for both
*Tochiotome* and *Amao* usually reaches 12 degrees.

# *Hokkaido* Farmer Developed Summer-Pick Strawberry

Domestically grown strawberries are available in the Japanese market
primarily in winter and spring. According to a Japanese press report, a
*Hokkaido* farmer developed a new variety called "*Pechica*" that can be
harvested in the summer and fall, when domestic production is scarce.
*Pechica* strawberry, which has less sweetness and a higher acidity, was
developed particularly for the confectionary industry. In 2005,
*Pechica* strawberries were cultivated by about 310 contracted farms in
*Hokkaido* and the *Tohoku* region, with an output of approximately 400
metric tons, which accounts for approximately 60 percent of the nation's
summer strawberry crop.

*Pechica* strawberries are now supplied to about 370 companies, up
sharply from about 80 three years ago. *Pechica* is now used nationwide
for summer confectionary use and is widely receiving a reputation for
good appearance and taste. Tokyo-based supermarket chain started selling
*Pechica* in June and July at some outlets about four years ago. One
retailer expects to double sales this summer. The next goal will be to
expand sales channels in order to boost household consumption, said
traders.

The current production of summer-pick strawberries is somewhat limited
but Japanese consumer preference for domestically grown products may
increase their demand for domestically grown summer-pick strawberries in
the near future.

# U.S. Fresh Strawberries Sell Well During Domestic Off-Seasons

![](media/image3.wmf)U.S. fresh strawberries continue to sell well in
the summer and fall when domestic berries are scarce. New crop U.S.
fresh strawberries arrive in April when the domestic strawberry season
is ending, and then California strawberry sales become active towards
the summer. Sales peak during September and October. U.S. sales continue
until the new Japanese crop sales start in December. According to
Japanese traders, approximately 80 to 90 percent of U.S. berries are
used in Japan's confectioneries as cake decorations and the rest are
sold for table consumption. Jobbers at the wholesale markets distribute
the majority of U.S. fresh strawberries to the same Japanese
confectionaries that they sell the domestic winter strawberries to. U.S.
strawberries were trading at approximately \$54.60 (6,500 yen) for a
5-kilogram carton at Tokyo's wholesale market in early October 2006.
Fresh berries are normally packaged in a 250-gram clamshell type plastic
container. Tokyo retailers sell them for approximately \$4.20 (500 yen)
per 250-gram package.

Japan imported approximately 3,700 metric tons of fresh strawberries
from the United States in the 2005 season (from October 2005 to
September 2006) valued at approximately \$30 million (CIF). This
accounted for approximately 96 percent of Japan's total fresh strawberry
imports. South Korea supplied approximately 163 metric tons in the same
period, valued at approximately \$2.26 million (CIF).

\* The exchange rate of 119.04 yen per dollar is used, based on the
Nikkei News on October 16, 2006.

# Higher Freight Costs Raised the Price of Strawberries from the United States

The CIF price for new crop U.S. strawberries increased approximately 5.5
percent from the previous season, due largely to the increase in
airfreight costs caused by higher gasoline prices. The airfreight
affects costs of U.S. strawberry prices significantly, since the
majority of U.S. fresh strawberries are transported to Japan by air and
the cost of airfreight accounts for approximately 40 percent of the CIF
price. The average CIF price for U.S. strawberries was \$8.15 per
kilogram for the period of April -- August 2006, while the price was
\$7.72 for the same period in 2005. The high cost of imports somewhat
discouraged Japanese traders from purchasing U.S. berries. The Japanese
import volume declined approximately 5.1 percent this season.

# Japan's Frozen Strawberry Imports Declined in 2005

![](media/image4.wmf)Japan imported approximately 25,900 metric tons of
frozen strawberries in the 2005 marketing year (from October 2005 to
September 2006) down approximately 4.5 percent from the previous year.
China is the largest supplier of frozen strawberries to Japan, supplying
approximately 17,600 metric tons this marketing year and accounting for
approximately 68 percent of total Japanese frozen strawberry imports,
valued at approximately \$19.0 million on a CIF basis. The United States
is also a very important player in Japan's frozen strawberry market,
supplying approximately 5,100 metric tons in 2005, valued at
approximately \$10.8 million (CIF). The U.S. holds approximately 20
percent of the market share in terms of volume.

The majority of imported frozen strawberries are used as an ingredient
for making jams and yogurt and price is an important factor for
manufacturers in order to stay competitive in the market. Chinese
product has a great advantage over U.S. product in terms of price. The
2005 average CIF price of frozen strawberries was \$1.07 per kilogram
for Chinese product and \$2.12 for U.S. product.

Japanese traders blame the recent declining imports of frozen
strawberries on increasing imports of ready-made jam products from
China. This has caused a decreased demand for frozen strawberry imports,
since Japan imports frozen berries mainly for making jam products. The
higher priced frozen berries such as those coming from the United States
are directly impacted by the increased imports of ready-made jam
products from China. For example, Japan imported 5,671 metric tons of
non-citrus jam products (2007.99 in the HS) from China in the
2005-marketing season. This shows a dramatic increase of 47 percent from
the previous season. Imports of non-sugar jam products in particular
(2007.99-121 in the HS) from China made a significant increase in the
2005 season to 1,094 metric tons from a mere 154 metric tons a year ago.

# High Import Duties Are Applied to Fresh and Frozen Strawberries

These duties are not subject to further reductions outside of the next
round of WTO negotiations. The applicable import duties are as follows:

+------------------------+---------------------------+-----------------+
| TARIFF CODE (HS)       | DESCRIPTION               | DUTY RATE       |
+------------------------+---------------------------+-----------------+
| 0810.10-000            | Fresh Strawberry          | 6.0 %           |
+------------------------+---------------------------+-----------------+
| 0811.10-100            | Frozen Strawberry         | 9.6 %           |
|                        |                           |                 |
|                        | Added Sugar               |                 |
+------------------------+---------------------------+-----------------+
| 0811.10-200            | Frozen Strawberry         | 12.0 %          |
|                        |                           |                 |
|                        | No Added Sugar            |                 |
+------------------------+---------------------------+-----------------+

All duties are charged on a CIF basis.

# The Positive List System Became Effective on May 29, 2006

On May 29, 2006 Japan implemented new regulations on maximum residue
limits (MRLs) for agricultural chemicals. The MRLs of agricultural
chemicals applied to strawberry products may be found in the following
web site:

<http://www.m5.ws001.squarestart.ne.jp/foundation/search.html> (English)

Related information on the positive list system may be found in GAIN
Reports JA6011, JA6025 and JA6027.

# PS&D Tables and Trade Matrices

## Fresh Strawberry PS&D Tables

  -------------- --------------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- -----------
  PSD Table                                                                                                     

  Country        Japan                                                                                          

  Commodity      Strawberries,                                                            (HA)(MT)              
                 Fresh                                                                                          

                 2004            Revised                2005       Estimate               2006       Forecast   

                 USDA\           Post\      Post\       USDA\      Post\      Post\       USDA\      Post\      Post\
                 Official        Estimate   Estimate\   Official   Estimate   Estimate\   Official   Estimate   Estimate\
                                            New                               New                               New

  Market Year                    10/2004    10/2004                10/2005    10/2005                10/2006    10/2006
  Begin                                                                                                         

  Area Planted   6900            6900       6880        6800       6800       6800        0          0          6700

  Area Harvested 6900            6900       6880        6800       6800       6800        0          0          6700

  Production     193000          193000     196200      188000     188000     193000      0          0          188000

  Imports        4152            4152       4057        4200       4200       3860        0          0          3850

  Total Supply   197152          197152     200257      192200     192200     196860      0          0          191850

  Exports, Fresh 30              30         30          30         30         64          0          0          80

  Fresh Dom.     196122          196122     199227      191170     191170     195796      0          0          190770
  Consumption                                                                                                   

  For Processing 1000            1000       1000        1000       1000       1000        0          0          1000

  Total          197152          197152     200257      192200     192200     196860      0          0          191850
  Distribution                                                                                                  
  -------------- --------------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- -----------

## Frozen Strawberry PS&D Table

  -------------- --------------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- -----------
  PSD Table                                                                                                     

  Country        Japan                                                                                          

  Commodity      Strawberries,                                                            (MT)                  
                 Frozen                                                                                         

                 2004            Revised                2005       Estimate               2006       Forecast   

                 USDA\           Post\      Post\       USDA\      Post\      Post\       USDA\      Post\      Post\
                 Official        Estimate   Estimate\   Official   Estimate   Estimate\   Official   Estimate   Estimate\
                                            New                               New                               New

  Market Year                    10/2004    10/2004                10/2005    10/2005                10/2006    10/2006
  Begin                                                                                                         

  Deliv. To      750             750        750         750        750        700         0          0          650
  Processors                                                                                                    

  Beginning      0               0          0           0          0          0           0          0          0
  Stocks                                                                                                        

  Production     700             700        700         700        700        700         0          0          650

  Imports        27460           27460      27099       28000      28000      25900       0          0          25000

  Total Supply   28160           28160      27799       28700      28700      26600       0          0          25650

  Exports        0               0          0           0          0          0           0          0          0

  Domestic       28160           28160      27799       28700      28700      26600       0          0          25650
  Consumption                                                                                                   

  Ending Stocks  0               0          0           0          0          0           0          0          0

  Total          28160           28160      27799       28700      28700      26600       0          0          25650
  Distribution                                                                                                  
  -------------- --------------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- -----------

## Fresh Strawberry Export Trade Matrix

  ------------------- ---------------- ------------------ ----------------
  Export Trade Matrix                                     

  Country             Japan                               

  Commodity           Strawberries,                       
                      Fresh                               

  Time Period         Oct.-Sept.       Units:             Metric Tons

  Exports for:        2004                                2005

  U.S.                0                U.S.               0

  Others                               Others             

  Hong Kong           19               Hong Kong          39

  Taiwan              10               Taiwan             25

                                                           

                                                           

                                                           

                                                           

                                                           

                                                           

                                                           

                                                           

  Total for Others    29                                  64

  Others not Listed   1                                   0

  Grand Total         30                                  64
  ------------------- ---------------- ------------------ ----------------

## Fresh Strawberry Import Trade Matrix

  ------------------ ---------------- ------------------ ----------------
  Import Trade                                           
  Matrix                                                 

  Country            Japan                               

  Commodity          Strawberries,                       
                     Fresh                               

  Time Period        Oct.-Sept.       Units:             Metric Tons

  Imports for:       2004                                2005

  U.S.               3875             U.S.               3767

  Others                              Others             

  South Korea        177              South Korea        173

  Australia          2                                    

  New Zealand        2                                    

                                                          

                                                          

                                                          

                                                          

                                                          

                                                          

                                                          

  Total for Others   181                                 173

  Others not Listed  1                                   0

  Grand Total        4057                                3940
  ------------------ ---------------- ------------------ ----------------

## Frozen Strawberry Import Trade Matrix

  ------------------ ---------------- ------------------ ----------------
  Import Trade                                           
  Matrix                                                 

  Country            Japan                               

  Commodity          Strawberries,                       
                     Frozen                              

  Time Period        Oct.-Sept.       Units:             Metric Tons

  Imports for:       2004                                2005

  U.S.               6110             U.S.               5169

  Others                              Others             

  China              17594            China              17447

  Chile              1310             Chile              1424

  South Korea        721              South Korea        450

  Thailand           388              Poland             326

  Poland             306              Egypt              274

  Mexico             229              Thailand           257

  Egypt              201              Mexico             184

  Turkey             80               Canada             47

  Belgium            43               Turkey             47

  Morocco            34               Morocco            23

  Total for Others   20906                               20479

  Others not Listed  83                                  43

  Grand Total        27099                               25691
  ------------------ ---------------- ------------------ ----------------

## Fresh Strawberry Wholesale Price Table

  -------------------- ---------------- ---------------- ----------------
  Prices Table                                           

  Country              Japan                             

  Commodity            Strawberries,                     
                       Fresh                             

  Prices in            Yen              per uom          KG

                                                         

  Year                 2005             2006             \% Change

  Jan                  1184             1247             5%

  Feb                  1176             1230             5%

  Mar                  1140             930              -18%

  Apr                  767              758              -1%

  May                  698              737              6%

  Jun                  837              843              1%

  Jul                  1147             1284             12%

  Aug                  1781             1646             -8%

  Sep                  2289                              -100%

  Oct                  2219                              -100%

  Nov                  1421                              -100%

  Dec                  1797                              -100%

                                                         

  Exchange Rate        117.08           Local            
                                        Currency/US \$   

  Date of Quote        09/27/2006       MM/DD/YYYY       
  -------------------- ---------------- ---------------- ----------------