Required Report - public distribution

**Date:** 3/12/2004

**GAIN Report Number:** JA4020

JA4020

**Japan**

**Grain and Feed**

**Grain and Feed Annual Report**

**2004**

**Approved by:**

![](media/image1.wmf)Clay Hamilton

U.S. Embassy

**Prepared by:**

Hisao Fukuda

**Report Highlights:**

Despite a 10 year low in rice production, no additional imports are
expected for 2004. The ban on U.S. beef imports and the outbreak of
avian influenza in Asia are disrupting Japan\'s livestock industry but
feed demand for beef cattle and swine is expected increase slightly. Due
to a shrinking harvest of grains in Eastern Europe and South America,
imports are likely to return to traditional supply sources in 2004.
While soaring trans-Pacific freight costs favor imports from China, a
tight domestic supply and an absence of government subsidies should
limit China\'s exports to Japan.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Tokyo \[JA1\]

\[JA\]

Table of Contents

[**RICE 4**](#rice)

[Production Volume Hits 10 Year Low
4](#production-volume-hits-10-year-low)

[Rice Consumption Continues Downward Trend
4](#rice-consumption-continues-downward-trend)

[Rice Price Soars Due to Short Crop but Returning to Normal
6](#rice-price-soars-due-to-short-crop-but-returning-to-normal)

[U.S. Maintains Near 50% Share of Imports but SBS Disrupted by Domestic
Shortage of Glutinous Rice
6](#u.s.-maintains-near-50-share-of-imports-but-sbs-disrupted-by-domestic-shortage-of-glutinous-rice)

[Trade for Processed Rice Products
9](#trade-for-processed-rice-products)

[Minimum Access Commitment Continues into 2004
9](#minimum-access-commitment-continues-into-2004)

[Export of Rice Under Food Aid 9](#export-of-rice-under-food-aid)

[Japan's Food Self-Sufficiency Ratio Stays at 40 percent
10](#japans-food-self-sufficiency-ratio-stays-at-40-percent)

[Marketing 12](#marketing)

[WHEAT 12](#wheat)

[Production Continues to Increase in 2003
12](#production-continues-to-increase-in-2003)

[Wheat Consumption Stays Flat 13](#wheat-consumption-stays-flat)

[Utilization Patterns 13](#utilization-patterns)

[Government Resale Price for 2004 to Be Lowered by 0.5 Percent
13](#government-resale-price-for-2004-to-be-lowered-by-0.5-percent)

[Wheat Imports Drop but Not to the Extent the Import Statistics Show
14](#wheat-imports-drop-but-not-to-the-extent-the-import-statistics-show)

[Feed Wheat Imports through SBS System
15](#feed-wheat-imports-through-sbs-system)

[Marketing 16](#marketing-1)

[Soybean Commingling in Wheat on the Watch
16](#soybean-commingling-in-wheat-on-the-watch)

[CORN 16](#corn)

[Production 16](#production)

[Livestock Industry Shaken by BSE in U.S. and Avian Influenza Outbreak
in Japan
16](#livestock-industry-shaken-by-bse-in-u.s.-and-avian-influenza-outbreak-in-japan)

[Utilization Patterns 18](#utilization-patterns-1)

[Production of Feed Up Short Term but Down Long Term
18](#production-of-feed-up-short-term-but-down-long-term)

[Prices 18](#prices)

[StarLink Issue Diminishing and Trade Relies on U.S. Supply as South
American Production Expected to Decline - China Remains a Wildcard
18](#starlink-issue-diminishing-and-trade-relies-on-u.s.-supply-as-south-american-production-expected-to-decline---china-remains-a-wildcard)

[Marketing - New Use Initiatives Continues
18](#marketing---new-use-initiatives-continues)

[SORGHUM 18](#sorghum)

[Production 18](#production-1)

[Consumption 18](#consumption)

[Trade 18](#trade)

[BARLEY 18](#barley)

[Production 18](#production-2)

[Consumption 18](#consumption-1)

[Prices 18](#prices-1)

[Trade 18](#trade-1)

[SBS Tender for Feed Barley since 1999
18](#sbs-tender-for-feed-barley-since-1999)

[OATS 18](#oats)

[Production 18](#production-3)

[Consumption 18](#consumption-2)

[Prices 18](#prices-2)

[Trade 18](#trade-2)

[BEANS 18](#beans)

[Production of Both Kidney Beans and Red Beans Drop
18](#production-of-both-kidney-beans-and-red-beans-drop)

[Consumption 18](#consumption-3)

[Trade 18](#trade-3)

[Policy 18](#policy)

[PS&D 18](#psd-1)

[Rice PS&D Table 18](#rice-psd-table)

[Wheat PS&D Table 18](#wheat-psd-table)

[Corn PS&D Table 18](#corn-psd-table)

[Sorghum PS&D Table 18](#sorghum-psd-table)

[Barley PS&D Table 18](#barley-psd-table)

[Oats PS&D Table 18](#oats-psd-table)

[Beans PS&D Table 18](#beans-psd-table)

# RICE

## Production Volume Hits 10 Year Low 

The Ministry of Agriculture, Forestry and Fisheries (MAFF) reduced total
harvested area in 2003 by 1.4 percent from the previous year to
1,665,000 hectares as a result of the continuation of an aggressive rice
production adjustment program. Production was severely affected by an
exceptionally cool, rainy summer, particularly in the northern regions,
and fell as much as 12.3 percent from the previous year to 7,779,000
metric tons (brown basis). This is the lowest production level since
1994. Unlike in 1994, however, MAFF currently holds sufficient stocks
that an overall supply shortage has not occurred. With the stocks
estimated at 1.6 million metric tons as of October 2003, total annual
table rice consumption of approximately 8.7 million tons should be met,
without imports beyond the Minimum Access commitment.

As part of its reforms under the new rice policy scheme announced in
December 2002 (GAIN Report #JA3012, Japan's Proposed Rice Reforms), MAFF
will begin phasing out the production adjustment program. This year, as
a first step, instead of allocating an acreage reduction target to each
prefecture, MAFF will set a production volume target for each
prefecture. The aggregate target volume nationwide for 2004 is set at
8.57 million metric tons.

+-----+------+-------+-------+-------+-------+-------+-------+-------+
| **  |      |       |       |       |       |       |       |       |
| *Ta |      |       |       |       |       |       |       |       |
| ble |      |       |       |       |       |       |       |       |
| 1.  |      |       |       |       |       |       |       |       |
| *** |      |       |       |       |       |       |       |       |
|     |      |       |       |       |       |       |       |       |
| **  |      |       |       |       |       |       |       |       |
| *Ja |      |       |       |       |       |       |       |       |
| pan |      |       |       |       |       |       |       |       |
| \'s |      |       |       |       |       |       |       |       |
| R   |      |       |       |       |       |       |       |       |
| ice |      |       |       |       |       |       |       |       |
| P   |      |       |       |       |       |       |       |       |
| rod |      |       |       |       |       |       |       |       |
| uct |      |       |       |       |       |       |       |       |
| ion |      |       |       |       |       |       |       |       |
| (Br |      |       |       |       |       |       |       |       |
| own |      |       |       |       |       |       |       |       |
| Bas |      |       |       |       |       |       |       |       |
| is) |      |       |       |       |       |       |       |       |
| *** |      |       |       |       |       |       |       |       |
+-----+------+-------+-------+-------+-------+-------+-------+-------+
|     |      |       |       |       |       |       |       |       |
+-----+------+-------+-------+-------+-------+-------+-------+-------+
|     | Pla  |       |       | Produ |       |       | Yie   |       |
|     | nted |       |       | ction |       |       | ld/10 |       |
|     | Area |       |       | (     |       |       | ares  |       |
|     | (1   |       |       | 1,000 |       |       | (     |       |
|     | ,000 |       |       | m     |       |       | kilog |       |
|     | h    |       |       | etric |       |       | rams) |       |
|     | ecta |       |       | tons) |       |       |       |       |
|     | res) |       |       |       |       |       |       |       |
+-----+------+-------+-------+-------+-------+-------+-------+-------+
|     | T    | Paddy | U     | Total | Paddy | U     | Paddy | U     |
|     | otal |       | pland |       |       | pland |       | pland |
+-----+------+-------+-------+-------+-------+-------+-------+-------+
| 1   | 1    | 1,780 | 7     | 9,175 | 9,159 | 16    | 515   | 214   |
| 999 | ,788 |       |       |       |       |       |       |       |
+-----+------+-------+-------+-------+-------+-------+-------+-------+
| 2   | 1    | 1,763 | 7     | 9,490 | 9,474 | 18    | 537   | 256   |
| 000 | ,770 |       |       |       |       |       |       |       |
+-----+------+-------+-------+-------+-------+-------+-------+-------+
| 2   | 1    | 1,700 | 6     | 9,057 | 9,048 | 9     | 532   | 144   |
| 001 | ,706 |       |       |       |       |       |       |       |
+-----+------+-------+-------+-------+-------+-------+-------+-------+
| 2   | 1    | 1,683 | 5     | 8,889 | 8,876 | 13    | 527   | 225   |
| 002 | ,688 |       |       |       |       |       |       |       |
+-----+------+-------+-------+-------+-------+-------+-------+-------+
| 2   | 1    | 1,660 | 5     | 7,792 | 7,779 | 13    | 469   | 250   |
| 003 | ,665 |       |       |       |       |       |       |       |
+-----+------+-------+-------+-------+-------+-------+-------+-------+
| S   |      |       |       |       |       |       |       |       |
| our |      |       |       |       |       |       |       |       |
| ce: |      |       |       |       |       |       |       |       |
| M   |      |       |       |       |       |       |       |       |
| AFF |      |       |       |       |       |       |       |       |
+-----+------+-------+-------+-------+-------+-------+-------+-------+

## Rice Consumption Continues Downward Trend 

According to MAFF's latest "Food Balance Sheet", the average annual per
capita consumption of rice in 2002 dropped 1.4 percent to 62.7 kilograms
from 63.6 kilograms in 2001, which is almost one half of the peak of
consumption in 1962 of 118.3 kilograms. The fundamental reasons are
diversification and westernization of Japanese eating habits. Instead of
eating rice with every meal, people can now more easily chose to eat
bread and pasta. Also in recent years a low carbohydrate diet has
attained media exposure, although not to the level currently seen in the
United States for a high protein diet, with the result of some people
turning away from heavy rice consumption. Another factor is the aging
population. While the elderly tend to eat more Japanese style food with
rice than the younger generation, they do not consume as much in
quantity as before. A price increase in rice caused by the poor harvest
this year (see the next subsection) will also affect consumption.
Consequently, Post projects a greater consumption decline than last year
for Rice Year 2003/04.

+--------+--------+-------+-------+-------+-------+--------+--------+
| **     |        |       |       |       |       |        |        |
| *Table |        |       |       |       |       |        |        |
| 2.***  |        |       |       |       |       |        |        |
|        |        |       |       |       |       |        |        |
| ***    |        |       |       |       |       |        |        |
| Annual |        |       |       |       |       |        |        |
| Per    |        |       |       |       |       |        |        |
| Capita |        |       |       |       |       |        |        |
| Consu  |        |       |       |       |       |        |        |
| mption |        |       |       |       |       |        |        |
| of     |        |       |       |       |       |        |        |
| Rice   |        |       |       |       |       |        |        |
| in     |        |       |       |       |       |        |        |
| Japan  |        |       |       |       |       |        |        |
| (K     |        |       |       |       |       |        |        |
| ilogra |        |       |       |       |       |        |        |
| ms)*** |        |       |       |       |       |        |        |
+--------+--------+-------+-------+-------+-------+--------+--------+
|        |        |       |       |       |       |        |        |
+--------+--------+-------+-------+-------+-------+--------+--------+
| 1962   | 1965   | 1975  | 1985  | 1995  | 2001  | 2002   | 2003\* |
+--------+--------+-------+-------+-------+-------+--------+--------+
| 118.3  | 111.7  | 88.0  | 74.6  | 67.8  | 63.6  | 62.7   | 61.2   |
+--------+--------+-------+-------+-------+-------+--------+--------+
| \* Ag  |        |       |       |       |       |        |        |
| Office |        |       |       |       |       |        |        |
| es     |        |       |       |       |       |        |        |
| timate |        |       |       |       |       |        |        |
+--------+--------+-------+-------+-------+-------+--------+--------+
| S      |        |       |       |       |       |        |        |
| ource: |        |       |       |       |       |        |        |
| MAFF   |        |       |       |       |       |        |        |
+--------+--------+-------+-------+-------+-------+--------+--------+
|        |        |       |       |       |       |        |        |
+--------+--------+-------+-------+-------+-------+--------+--------+

![](media/image2.wmf)

As a result of the reduction in consumption, and also a decline in the
price of rice over the years, household expenditures on rice have been
cut by more than half since 1985. The average Japanese household now
spends 4 percent of food expenditures on rice.

<table>
<colgroup>
<col style="width: 12%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="7"><p><em><strong>Table 3.</strong></em></p>
<p><em><strong>Average Monthly Expenditures on Rice by Japanese
Household (in Yen)</strong></em></p></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td> </td>
<td>1985</td>
<td>1996</td>
<td>1997</td>
<td>1998</td>
<td>1999</td>
<td>2000</td>
<td>2001</td>
<td>2002</td>
<td>2003</td>
</tr>
<tr class="even">
<td>Total</td>
<td>273,114</td>
<td>328,849</td>
<td>333,313</td>
<td>328,186</td>
<td>323,008</td>
<td>317,133</td>
<td>308,692</td>
<td>306,129</td>
<td>302,623</td>
</tr>
<tr class="odd">
<td>Expenditure</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr class="even">
<td>Food</td>
<td>73,735</td>
<td>77,042</td>
<td>78,306</td>
<td>78,156</td>
<td>76,590</td>
<td>73,844</td>
<td>71,534</td>
<td>71,286</td>
<td>70,260</td>
</tr>
<tr class="odd">
<td>Expenditure</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr class="even">
<td>Expenditure</td>
<td>6,233</td>
<td>4,092</td>
<td>3,863</td>
<td>3,712</td>
<td>3,527</td>
<td>3,291</td>
<td>3,113</td>
<td>2,992</td>
<td>3,041</td>
</tr>
<tr class="odd">
<td>on Rice</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr class="even">
<td>% rice/food</td>
<td>8.5%</td>
<td>5.3%</td>
<td>4.9%</td>
<td>4.7%</td>
<td>4.6%</td>
<td>4.5%</td>
<td>4.4%</td>
<td>4.2%</td>
<td>4.3%</td>
</tr>
</tbody>
</table>

Source: Ministry of Management, Home Affairs, Post and
Telecommunications

## 

## 

## Rice Price Soars Due to Short Crop but Returning to Normal 

Due to the short crop this season and led in part by speculation of
scarcity in certain high value brands, prices in early tenders increased
by 20 to 50 percent over the previous year. Speculative bidding now
appears to have calmed down and the retail market under the current
stagnant economy does not accommodate significant increase in retail
price. Therefore, the traded price is beginning to return to last year's
level.

In the Japanese rice distribution system, rice is marketed in two
ways, 1) orderly marketed rice (rice marketed with government
involvement) and 2) non-orderly marketed rice (rice sold directly to
wholesalers, retailers, foodservice users and consumers). Although the
latter is increasing, now accounting for half of total rice sales, the
tenders held by the Voluntarily-Marketed Rice Distribution Corporation
under the orderly marketed rice program continue to be a key indicator
for both the wholesale and retail price of rice. For the 2002 crop, 15
tenders were held. For the 2003 crop, 10 tenders have been held to date.

![](media/image3.wmf)

Source: Voluntarily-Marketed Rice Distribution Corporation

<table style="width:100%;">
<colgroup>
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="6"><p><em><strong>Table 4.</strong></em></p>
<p><em><strong>Retail Price of Rice in Tokyo Area (Yen/10
kg)</strong></em></p></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>1994</td>
<td>1995</td>
<td>1996</td>
<td>1997</td>
<td>1998</td>
<td>1999</td>
<td>2000</td>
<td>2001</td>
<td>2002</td>
<td>2003</td>
</tr>
<tr class="even">
<td>6,953</td>
<td>5,675</td>
<td>5,374</td>
<td>5,218</td>
<td>5,017</td>
<td>5,059</td>
<td>4,934</td>
<td>4,745</td>
<td>4,788</td>
<td>4,983</td>
</tr>
<tr class="odd">
<td colspan="7">Source: Ministry of Management, Home Affairs, Post and
Telecommunications</td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table>

## U.S. Maintains Near 50% Share of Imports but SBS Disrupted by Domestic Shortage of Glutinous Rice

# 

Currently, for JFY 2003 (April 2003 -- March 2004), the total U.S.
market share remains at the same level (46.2 percent) as in previous
years. To date MAFF has held four Simultaneous Buy and Sell (SBS)
tenders and five Ordinary Minimum Access (OMA) tenders. With one more
OMA tender remaining. Due to a poor harvest this season, glutinous rice
was particularly scarce. As a result, importers turned to the SBS
imports to meet domestic demand and bid abnormally high to get the
quantity they needed. Since there is no category bidding in the SBS
system, those importers seeking regular rice had to outbid those seeking
glutinous rice. As a result, the price of U.S. short grain rice imported
under the SBS system increased sharply (see GAIN Report #JA3081, Results
of the 2003 SBS Rice Tenders).

![](media/image4.wmf)

Source: MAFF

+-----------+---------+---------+---------+---------+-------+---------+
| ***Table  |         |         |         |         |       |         |
| 5.***     |         |         |         |         |       |         |
|           |         |         |         |         |       |         |
| ***Result |         |         |         |         |       |         |
| of        |         |         |         |         |       |         |
| Japan\'s  |         |         |         |         |       |         |
| Minimum   |         |         |         |         |       |         |
| Access    |         |         |         |         |       |         |
| Rice      |         |         |         |         |       |         |
| Tenders   |         |         |         |         |       |         |
| (JFY      |         |         |         |         |       |         |
| 1995 -    |         |         |         |         |       |         |
| 2003)***  |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
| *         |         |         |         |         |       |         |
| **(Actual |         |         |         |         |       |         |
| To        |         |         |         |         |       |         |
| nnage)*** |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
|           |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
|           | U.S.    | T       | Au      | China   | O     | Total   |
|           |         | hailand | stralia |         | thers |         |
+-----------+---------+---------+---------+---------+-------+---------+
| ***JFY    | One     |         |         |         |       |         |
| 2003***   | more    |         |         |         |       |         |
|           | OMA     |         |         |         |       |         |
|           | tender  |         |         |         |       |         |
|           | re      |         |         |         |       |         |
|           | maining |         |         |         |       |         |
|           | for     |         |         |         |       |         |
|           | 2003    |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
| SBS       | 18,216  | 1,145   | 1,570   | 78,803  | 266   | 100,000 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *18.2%* | *1.1%*  | *1.6%*  | *78.8%* | *     | *       |
|           |         |         |         |         | 0.3%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| OMA       | 262,500 | 123,300 | 67,000  | 19,500  | 3     | 507,300 |
|           |         |         |         |         | 5,000 |         |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *51.7%* | *24.3%* | *13.2%* | *3.8%*  | *     | *       |
|           |         |         |         |         | 6.9%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| Total     | 280,716 | 124,445 | 68,570  | 98,303  | 3     | 607,300 |
|           |         |         |         |         | 5,266 |         |
+-----------+---------+---------+---------+---------+-------+---------+
| Share     | *46.2%* | *20.5%* | *11.3%* | *16.2%* | *     | *       |
|           |         |         |         |         | 5.8%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| ***JFY    |         |         |         |         |       |         |
| 2002***   |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
| SBS       | 20,122  | 1,327   | 4,077   | 24,247  | 294   | 50,067  |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *40.2%* | *2.7%*  | *8.1%*  | *48.4%* | *     | *       |
|           |         |         |         |         | 0.6%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| OMA       | 301,676 | 134,808 | 82,500  | 75,690  | 3     | 629,474 |
|           |         |         |         |         | 4,800 |         |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *47.9%* | *21.4%* | *13.1%* | *12.0%* | *     | *       |
|           |         |         |         |         | 5.5%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| Total     | 321,798 | 136,135 | 86,577  | 99,937  | 3     | 679,541 |
|           |         |         |         |         | 5,094 |         |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *47.4%* | *20.0%* | *12.7%* | *14.7%* | *     | *       |
|           |         |         |         |         | 5.2%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| ***JFY    |         |         |         |         |       |         |
| 2001***   |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
| SBS       | 25,173  | 421     | 8,529   | 65,702  | 175   | 100,000 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *25.2%* | *0.4%*  | *8.5%*  | *65.7%* | *     | *       |
|           |         |         |         |         | 0.2%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| OMA       | 298,877 | 129,376 | 91,500  | 55,516  | 4,700 | 579,969 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *51.5%* | *22.3%* | *15.8%* | *9.6%*  | *     | *       |
|           |         |         |         |         | 0.8%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| Total     | 324,050 | 129,797 | 100,029 | 121,218 | 4,875 | 679,969 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *47.7%* | *19.1%* | *14.7%* | *17.8%* | *     | *       |
|           |         |         |         |         | 0.7%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| ***JFY    |         |         |         |         |       |         |
| 2000***   |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
| SBS       | 46,273  | 4,960   | 14,269  | 53,264  | 1,234 | 120,000 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *38.6%* | *4.1%*  | *11.9%* | *44.4%* | *     | *       |
|           |         |         |         |         | 1.0%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| OMA       | 284,000 | 144,370 | 94,000  | 35,000  | 1     | 573,039 |
|           |         |         |         |         | 5,669 |         |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *49.6%* | *25.2%* | *16.4%* | *6.1%*  | *     | *       |
|           |         |         |         |         | 2.7%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| Total     | 330,273 | 149,330 | 108,269 | 88,264  | 1     | 693,039 |
|           |         |         |         |         | 6,903 |         |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *47.7%* | *21.5%* | *15.6%* | *12.7%* | *     | *       |
|           |         |         |         |         | 2.4%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| ***JFY    |         |         |         |         |       |         |
| 1999***   |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
| SBS       | 36,826  | 3,753   | 14,587  | 62,611  | 2,223 | 120,000 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *30.7%* | *3.1%*  | *12.2%* | *52.2%* | *     | *       |
|           |         |         |         |         | 1.9%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| OMA       | 276,000 | 138,200 | 90,000  | 13,900  | 1     | 533,100 |
|           |         |         |         |         | 5,000 |         |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *51.8%* | *25.9%* | *16.9%* | *2.6%*  | *     | *       |
|           |         |         |         |         | 2.8%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| Total     | 312,826 | 141,953 | 104,587 | 76,511  | 1     | 653,100 |
|           |         |         |         |         | 7,223 |         |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *47.9%* | *21.7%* | *16.0%* | *11.7%* | *     | *       |
|           |         |         |         |         | 2.6%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| ***JFY    |         |         |         |         |       |         |
| 1998***   |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
| SBS       | 36,498  | 5,297   | 14,538  | 61,965  | 1,702 | 120,000 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *30.4%* | *4.4%*  | *12.1%* | *51.6%* | *     | *       |
|           |         |         |         |         | 1.4%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| OMA       | 265,400 | 130,000 | 87,000  | 10,000  | 2     | 512,400 |
|           |         |         |         |         | 0,000 |         |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *51.8%* | *25.4%* | *17.0%* | *2.0%*  | *     | *       |
|           |         |         |         |         | 3.9%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| Total     | 301,898 | 135,297 | 101,538 | 71,965  | 2     | 632,400 |
|           |         |         |         |         | 1,702 |         |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *47.7%* | *21.4%* | *16.1%* | *11.4%* | *     | *       |
|           |         |         |         |         | 3.4%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| ***JFY    |         |         |         |         |       |         |
| 1997***   |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
| SBS       | 34,657  | 911     | 3,159   | 13,882  | 2,532 | 55,141  |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *62.9%* | *1.7%*  | *5.7%*  | *25.2%* | *     | *       |
|           |         |         |         |         | 4.6%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| OMA       | 237,900 | 133,900 | 82,400  | 30,000  | 5,000 | 489,200 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *48.6%* | *27.4%* | *16.8%* | *6.1%*  | *     | *       |
|           |         |         |         |         | 1.0%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| Total     | 272,557 | 134,811 | 85,559  | 43,882  | 7,532 | 544,341 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *50.1%* | *24.8%* | *15.7%* | *8.1%*  | *     | *       |
|           |         |         |         |         | 1.4%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| ***JFY    |         |         |         |         |       |         |
| 1996***   |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
| SBS       | 14,134  | 360     | 1,173   | 5,113   | 1,220 | 22,000  |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *64.2%* | *1.6%*  | *5.3%*  | *23.2%* | *     | *       |
|           |         |         |         |         | 5.5%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| OMA       | 201,000 | 127,650 | 80,000  | 35,000  | 0     | 443,650 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *45.3%* | *28.8%* | *18.0%* | *7.9%*  | *     | *       |
|           |         |         |         |         | 0.0%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| Total     | 215,134 | 128,010 | 81,173  | 40,113  | 1,220 | 465,650 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *46.2%* | *27.5%* | *17.4%* | *8.6%*  | *     | *       |
|           |         |         |         |         | 0.3%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| ***JFY    |         |         |         |         |       |         |
| 1995***   |         |         |         |         |       |         |
+-----------+---------+---------+---------+---------+-------+---------+
| SBS       | 5,715   | 246     | 1,935   | 2,390   | 408   | 10,694  |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *53.4%* | *2.3%*  | *18.1%* | *22.3%* | *     | *       |
|           |         |         |         |         | 3.8%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| OMA       | 188,000 | 95,100  | 85,000  | 30,000  | 0     | 398,100 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *47.2%* | *23.9%* | *21.4%* | *7.5%*  | *     | *       |
|           |         |         |         |         | 0.0%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+
| Total     | 193,715 | 95,346  | 86,935  | 32,390  | 408   | 408,794 |
+-----------+---------+---------+---------+---------+-------+---------+
| *Share*   | *47.4%* | *23.3%* | *21.3%* | *7.9%*  | *     | *       |
|           |         |         |         |         | 0.1%* | 100.0%* |
+-----------+---------+---------+---------+---------+-------+---------+

Source: MAFF

## 

## 

## Trade for Processed Rice Products

The United States is the second largest exporter of rice flour
preparations to Japan after Thailand. The shortage of glutinous rice,
mentioned in the previous section, resulted in an increase in imports of
flour preparation in 2003. However, the U.S. share in the imports of
rice crackers, pilaf and *sake* (rice wine) remains small due to high
labor costs compared to countries like Thailand (the largest exporter of
rice crackers and pilaf), the Republic of Korea and China (major
exporters of *sake*).

+--------------+---------+--------+--------+--------+--------+--------+
| ###          |         |        |        |        |        |        |
| ### Table 6. |         |        |        |        |        |        |
|              |         |        |        |        |        |        |
| ##           |         |        |        |        |        |        |
| #### Japanes |         |        |        |        |        |        |
| e Imports of |         |        |        |        |        |        |
|  Processed R |         |        |        |        |        |        |
| ice Products |         |        |        |        |        |        |
+--------------+---------+--------+--------+--------+--------+--------+
| ***(MT,      |         |        |        |        |        |        |
| except       |         |        |        |        |        |        |
| sake)***     |         |        |        |        |        |        |
+--------------+---------+--------+--------+--------+--------+--------+
|              |         |        |        |        |        |        |
+--------------+---------+--------+--------+--------+--------+--------+
|              | CY 2001 |        | CY     |        | CY     |        |
|              |         |        | 2002   |        | 2003   |        |
+--------------+---------+--------+--------+--------+--------+--------+
|              | Total   | U.S.   | Total  | U.S.   | Total  | U.S.   |
+--------------+---------+--------+--------+--------+--------+--------+
| Flour        | 106,157 | 27,132 | 1      | 28,018 | 1      | 28,173 |
| preparations |         |        | 02,499 |        | 11,761 |        |
+--------------+---------+--------+--------+--------+--------+--------+
| Rice         | 6,457   | 13     | 6,700  | 8      | 7,478  | 1      |
| Crackers     |         |        |        |        |        |        |
+--------------+---------+--------+--------+--------+--------+--------+
| Pilaf        | 655     | 1      | 902    | 3      | 611    | 2      |
+--------------+---------+--------+--------+--------+--------+--------+
| Sake (1,000  | 2,403   | 16     | 2,527  | 10     | 2,537  | 4      |
| liters)      |         |        |        |        |        |        |
+--------------+---------+--------+--------+--------+--------+--------+
| Source:      |         |        |        |        |        |        |
| Ministry of  |         |        |        |        |        |        |
| Finance      |         |        |        |        |        |        |
+--------------+---------+--------+--------+--------+--------+--------+

## Minimum Access Commitment Continues into 2004

# 

As a result of the GOJ's tariffication of rice in JFY 2000, the Minimum
Access commitment was reduced to 7.2 percent of total domestic
consumption from non-tarrified rate of 8.0 percent. In terms of volume,
7.2 percent is equivalent to 682,000 metric tons. This volume will
remain in effect unless renegotiated. Japan may request a revision of
the base year used for consumption in the WTO Doha round.

+-------+------------+---+-----------------+--------+---+-----+----------+
| ##### |            |   |                 |        |   |     |          |
| # Tab |            |   |                 |        |   |     |          |
| le 7. |            |   |                 |        |   |     |          |
|       |            |   |                 |        |   |     |          |
| #     |            |   |                 |        |   |     |          |
| ##### |            |   |                 |        |   |     |          |
|  Mark |            |   |                 |        |   |     |          |
| et Ac |            |   |                 |        |   |     |          |
| cess  |            |   |                 |        |   |     |          |
| Oblig |            |   |                 |        |   |     |          |
| ation |            |   |                 |        |   |     |          |
| s for |            |   |                 |        |   |     |          |
|  Rice |            |   |                 |        |   |     |          |
+-------+------------+---+-----------------+--------+---+-----+----------+
| **    |            |   |                 |        |   |     |          |
| *(MT, |            |   |                 |        |   |     |          |
| Mi    |            |   |                 |        |   |     |          |
| nimum |            |   |                 |        |   |     |          |
| A     |            |   |                 |        |   |     |          |
| ccess |            |   |                 |        |   |     |          |
| as    |            |   |                 |        |   |     |          |
| Pe    |            |   |                 |        |   |     |          |
| rcent |            |   |                 |        |   |     |          |
| of    |            |   |                 |        |   |     |          |
| Dom   |            |   |                 |        |   |     |          |
| estic |            |   |                 |        |   |     |          |
| Rice  |            |   |                 |        |   |     |          |
| Consu |            |   |                 |        |   |     |          |
| mptio |            |   |                 |        |   |     |          |
| n)*** |            |   |                 |        |   |     |          |
+-------+------------+---+-----------------+--------+---+-----+----------+
|       |            |   |                 |        |   |     |          |
+-------+------------+---+-----------------+--------+---+-----+----------+
|       | Without    |   |                 | With   |   |     |          |
|       | Tar        |   |                 | T      |   |     |          |
|       | iffication |   |                 | ariffi |   |     |          |
|       |            |   |                 | cation |   |     |          |
+-------+------------+---+-----------------+--------+---+-----+----------+
|       | Volume     |   | Percent of      | Volume |   | P   |          |
|       |            |   |                 |        |   | erc |          |
|       |            |   |                 |        |   | ent |          |
|       |            |   |                 |        |   | of  |          |
+-------+------------+---+-----------------+--------+---+-----+----------+
|       |            |   | Domestic        |        |   | Do  |          |
|       |            |   | Consumption     |        |   | mes |          |
|       |            |   |                 |        |   | tic |          |
|       |            |   |                 |        |   | Co  |          |
|       |            |   |                 |        |   | nsu |          |
|       |            |   |                 |        |   | mpt |          |
|       |            |   |                 |        |   | ion |          |
+-------+------------+---+-----------------+--------+---+-----+----------+
| JFY   |            |   |                 |        |   |     |          |
| 2000  |            |   |                 |        |   |     |          |
+-------+------------+---+-----------------+--------+---+-----+----------+
| o     | 758,000    |   | 8.0 percent     | 6      |   | 7.2 |          |
| nward |            |   |                 | 82,000 |   | p   |          |
|       |            |   |                 |        |   | erc |          |
|       |            |   |                 |        |   | ent |          |
+-------+------------+---+-----------------+--------+---+-----+----------+
| So    |            |   |                 |        |   |     |          |
| urce: |            |   |                 |        |   |     |          |
| MAFF  |            |   |                 |        |   |     |          |
+-------+------------+---+-----------------+--------+---+-----+----------+

## Export of Rice Under Food Aid 

The Government of Japan sets aside and exports about 200,000 MT of rice
under food aid programs on an annual basis. This amount does not show up
in the export statistics by the Ministry of Finance, which only records
exports of Japanese domestic rice (22,708 MT in 2003 which includes a
negligible amount of commercial exports). The discrepancy between the
200,000 MT and the amount recorded in the official export statistics is
considered to be rice imported under the OMA regime and diverted for
Food Aid exports. In 2003 this amounted to over 177,000 MT. The Ministry
of Foreign Affairs (MOFA) manages the Food Aid programs and the table
below shows Japan's Food Aid exports of rice in the most recent
reporting period of July 2002 -- June 2003.

+------------+---------------------------------+-----------------------+
| #######    |                                 |                       |
|  Table 8.  |                                 |                       |
|            |                                 |                       |
| ###        |                                 |                       |
| #### Japan |                                 |                       |
| \'s Rice E |                                 |                       |
| xports und |                                 |                       |
| er Food Ai |                                 |                       |
| d Programs |                                 |                       |
+------------+---------------------------------+-----------------------+
| ***Fiscal  |                                 |                       |
| 2002 (July |                                 |                       |
| 2002 -     |                                 |                       |
| June       |                                 |                       |
| 2003)***   |                                 |                       |
+------------+---------------------------------+-----------------------+
|            |                                 |                       |
+------------+---------------------------------+-----------------------+
|            | Country                         | Quantity (in MT)      |
+------------+---------------------------------+-----------------------+
| Bilat      | Laos                            | 15,000                |
+------------+---------------------------------+-----------------------+
|            | Angola                          | 20,002                |
+------------+---------------------------------+-----------------------+
|            | Benin                           | 4,366                 |
+------------+---------------------------------+-----------------------+
|            | Cape Verde                      | 4,251                 |
+------------+---------------------------------+-----------------------+
|            | Ghana                           | 10,504                |
+------------+---------------------------------+-----------------------+
|            | Guinea                          | 11,260                |
+------------+---------------------------------+-----------------------+
|            | Haiti                           | 10,246                |
+------------+---------------------------------+-----------------------+
|            | Mauritania                      | 9,001                 |
+------------+---------------------------------+-----------------------+
|            | Mongolia                        | 14,406                |
+------------+---------------------------------+-----------------------+
|            | Mozambique                      | 18,552                |
+------------+---------------------------------+-----------------------+
|            | Sao Tome & Princicipe           | 5,005                 |
+------------+---------------------------------+-----------------------+
|            | Senegal                         | 6,849                 |
+------------+---------------------------------+-----------------------+
|            | Tanzania                        | 20,003                |
+------------+---------------------------------+-----------------------+
|            | Subtotal                        | 149,445               |
+------------+---------------------------------+-----------------------+
| WFP        | Cambodia                        | 25,670                |
+------------+---------------------------------+-----------------------+
|            | Congo                           | 1,170                 |
+------------+---------------------------------+-----------------------+
|            | Cote d\'Ivoire                  | 2,647                 |
+------------+---------------------------------+-----------------------+
|            | Haiti                           | 1,200                 |
+------------+---------------------------------+-----------------------+
|            | Madagascar                      | 300                   |
+------------+---------------------------------+-----------------------+
|            | Mozambique                      | 4,145                 |
+------------+---------------------------------+-----------------------+
|            | Nicaragua                       | 1,079                 |
+------------+---------------------------------+-----------------------+
| UNRWA      | Palestine Refugees              | 3,431                 |
+------------+---------------------------------+-----------------------+
|            | Subtotal                        | 39,642                |
+------------+---------------------------------+-----------------------+
|            | **TOTAL**                       | **189,087**           |
+------------+---------------------------------+-----------------------+

Source: Ministry of Foreign Affairs

## Japan's Food Self-Sufficiency Ratio Stays at 40 percent

In 2000 MAFF announced a self-sufficiency target of 45 percent on a
caloric basis for JFY 2010. Japan's self-sufficiency consistently
declined for many years but has remained steady at 40 percent since
1998. With the current BSE-related suspension of U.S. beef imports,
which had occupied over 30 percent of Japan's beef consumption, Diet
members from several parties as well as the press are stressing the
necessity to improve food self-sufficiency. A campaign featuring the
slogan "*Chisan Chisho* (Produce locally and consume locally)" is
spreading and appears to be gaining momentum. However, many agricultural
analysts doubt that Japan will be able to increase its self-sufficiency
significantly for a variety of reasons including the high cost of
production and the aging of the farm sector.

<table>
<colgroup>
<col style="width: 18%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="4"><p><em><strong>Table 9.</strong></em></p>
<p><em><strong>Japan's Self-Sufficiency Ratio (%)</strong></em></p></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td> </td>
<td>1960</td>
<td>1975</td>
<td>1985</td>
<td>1990</td>
<td>1995</td>
<td>1996</td>
<td>1997</td>
<td>1998</td>
<td>1999</td>
<td>2000</td>
<td>2001</td>
<td>2002*</td>
</tr>
<tr class="even">
<td>Rice</td>
<td>96</td>
<td>110</td>
<td>107</td>
<td>100</td>
<td>104</td>
<td>102</td>
<td>99</td>
<td>95</td>
<td>95</td>
<td>95</td>
<td>95</td>
<td>96</td>
</tr>
<tr class="odd">
<td>Wheat</td>
<td>28</td>
<td>4</td>
<td>14</td>
<td>15</td>
<td>7</td>
<td>7</td>
<td>9</td>
<td>9</td>
<td>9</td>
<td>11</td>
<td>11</td>
<td>13</td>
</tr>
<tr class="even">
<td>Beans</td>
<td>25</td>
<td>9</td>
<td>8</td>
<td>8</td>
<td>5</td>
<td>5</td>
<td>5</td>
<td>5</td>
<td>6</td>
<td>7</td>
<td>7</td>
<td>7</td>
</tr>
<tr class="odd">
<td>Soybeans</td>
<td>11</td>
<td>4</td>
<td>5</td>
<td>5</td>
<td>2</td>
<td>3</td>
<td>3</td>
<td>3</td>
<td>4</td>
<td>5</td>
<td>5</td>
<td>5</td>
</tr>
<tr class="even">
<td>Vegetables</td>
<td>100</td>
<td>99</td>
<td>95</td>
<td>91</td>
<td>85</td>
<td>86</td>
<td>86</td>
<td>84</td>
<td>83</td>
<td>82</td>
<td>82</td>
<td>83</td>
</tr>
<tr class="odd">
<td>Fruit</td>
<td>90</td>
<td>84</td>
<td>77</td>
<td>63</td>
<td>49</td>
<td>47</td>
<td>53</td>
<td>49</td>
<td>49</td>
<td>44</td>
<td>45</td>
<td>44</td>
</tr>
<tr class="even">
<td>Meats</td>
<td>90</td>
<td>77</td>
<td>81</td>
<td>70</td>
<td>57</td>
<td>55</td>
<td>56</td>
<td>55</td>
<td>54</td>
<td>52</td>
<td>53</td>
<td>53</td>
</tr>
<tr class="odd">
<td>Beef</td>
<td>95</td>
<td>81</td>
<td>72</td>
<td>51</td>
<td>39</td>
<td>39</td>
<td>36</td>
<td>35</td>
<td>36</td>
<td>34</td>
<td>36</td>
<td>39</td>
</tr>
<tr class="even">
<td>Eggs</td>
<td>100</td>
<td>97</td>
<td>98</td>
<td>98</td>
<td>96</td>
<td>96</td>
<td>96</td>
<td>96</td>
<td>96</td>
<td>95</td>
<td>96</td>
<td>96</td>
</tr>
<tr class="odd">
<td>Milk/Dairy Products</td>
<td>86</td>
<td>81</td>
<td>85</td>
<td>78</td>
<td>72</td>
<td>72</td>
<td>71</td>
<td>71</td>
<td>70</td>
<td>68</td>
<td>68</td>
<td>69</td>
</tr>
<tr class="even">
<td>Seafood (for food)</td>
<td>110</td>
<td>100</td>
<td>86</td>
<td>72</td>
<td>59</td>
<td>58</td>
<td>60</td>
<td>57</td>
<td>55</td>
<td>53</td>
<td>53</td>
<td>53</td>
</tr>
<tr class="odd">
<td>Sugar</td>
<td>31</td>
<td>15</td>
<td>33</td>
<td>32</td>
<td>31</td>
<td>28</td>
<td>29</td>
<td>32</td>
<td>31</td>
<td>29</td>
<td>32</td>
<td>34</td>
</tr>
<tr class="even">
<td>Self-sufficiency</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr class="odd">
<td>(Calorie Basis)</td>
<td>73</td>
<td>54</td>
<td>53</td>
<td>48</td>
<td>43</td>
<td>42</td>
<td>41</td>
<td>40</td>
<td>40</td>
<td>40</td>
<td>40</td>
<td>40</td>
</tr>
<tr class="even">
<td>Self-sufficiency</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr class="odd">
<td>(Major Food Grains)</td>
<td>80</td>
<td>69</td>
<td>69</td>
<td>67</td>
<td>65</td>
<td>63</td>
<td>62</td>
<td>59</td>
<td>59</td>
<td>60</td>
<td>60</td>
<td>61</td>
</tr>
<tr class="even">
<td>Self-sufficiency</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr class="odd">
<td>(Major Feed Grains)</td>
<td>55</td>
<td>34</td>
<td>27</td>
<td>26</td>
<td>26</td>
<td>25</td>
<td>25</td>
<td>25</td>
<td>24</td>
<td>26</td>
<td>25</td>
<td>24</td>
</tr>
<tr class="even">
<td>Self-sufficiency</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr class="odd">
<td>(Food + Feed Grains)</td>
<td>62</td>
<td>40</td>
<td>31</td>
<td>30</td>
<td>30</td>
<td>29</td>
<td>28</td>
<td>27</td>
<td>27</td>
<td>28</td>
<td>28</td>
<td>28</td>
</tr>
<tr class="even">
<td>Source: MAFF</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>* Preliminary</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table>

![](media/image5.wmf)

## Marketing

The biggest constraint to marketing U.S. rice in Japan is the difficulty
of securing a steady supply at a stable price through the SBS system.
This year it was extremely difficult to get regular short grain rice due
to an unusual demand for glutinous rice caused by the domestic shortage.
To be successful in the process, bids had to be marked up so high that
the end user's price for U.S. rice has become more expensive at times
than Japanese rice of an equivalent quality. Nonetheless, the USA Rice
Federation (USARF) continues to conduct a creative marketing program
targeting repeat customers. In an effort to develop a consistent
clientele, USARF launched a "USA Rice Shop Network" in 2002 where
individually owned rice shops in Tokyo and Osaka metropolitan areas
agree to sell U.S. rice all year around. These small, independent shops
have strong community ties and sell freshly milled rice directly to the
consumer. The owners are connoisseurs of rice and are able to explain
the characteristics of U.S. rice to customers. The first year of this
campaign progressed successfully and obtained much media exposure. This
year the network will be expanded to other major cities in Japan.

# 

# 

# WHEAT

## Production Continues to Increase in 2003

The total planted area for wheat increased 2.6 percent to 212,200
hectares in 2003, largely as a result of the rice diversion program. As
a result of the higher acreage and good weather, production volume also
increased 3.3 percent to 855,200 MT. Under the new rice policy,
Beginning in JFY 2004, MAFF will be encouraging a permanent switch to
the production of wheat through the use of subsidies while it phases out
its program to divert land from paddy rice by JFY 2008. While MAFF's
goal is to continue the upward trend in wheat production, it is
difficult to forecast at this point whether the new program will be
successful or not. Domestic flour millers would rather not use the
rather low quality domestic wheat unless the price is kept low with
government subsidies. Therefore, an expansion of domestic wheat
production will ultimately depend on whether or not Japanese producers
will be able to produce wheat that is acceptable to end-users in price
and quality. An increased scale of farming in the areas suited for wheat
production like Hokkaido will be necessary, and introduction of
de-coupled payments to producers may hold the key to achieving such
objectives, instead of spreading subsidies thin in order to include
small producers. As the politically influential agricultural co-op's
oppose such trends, the overall rice policy reform is expected to face a
rough road ahead as it moves toward completion in 2008. In the interim,
Post projects that the current level of production is near the ceiling
that the market can absorb with the current level of price support (see
the following section on *Government Purchase and Resale Prices*.) In
2004, Post forecasts that the planted acreage will further increase but
production will decline slightly as the yield returns to normal.

+-----------+------------------------------+--------------------------+
| #######   |                              |                          |
| Table 10. |                              |                          |
|           |                              |                          |
| ######    |                              |                          |
| # Japan\' |                              |                          |
| s Wheat P |                              |                          |
| roduction |                              |                          |
+-----------+------------------------------+--------------------------+
|           |                              |                          |
+-----------+------------------------------+--------------------------+
|           | Planted Area                 | Production               |
+-----------+------------------------------+--------------------------+
|           | (hectares)                   | (1,000 MT)               |
+-----------+------------------------------+--------------------------+
| 1999      | 168,800                      | 583,100                  |
+-----------+------------------------------+--------------------------+
| 2000      | 183,000                      | 688,200                  |
+-----------+------------------------------+--------------------------+
| 2001      | 196,900                      | 699,900                  |
+-----------+------------------------------+--------------------------+
| 2002      | 206,900                      | 827,800                  |
+-----------+------------------------------+--------------------------+
| 2003      | 212,200                      | 855,200                  |
+-----------+------------------------------+--------------------------+
| Source:   |                              |                          |
| MAFF      |                              |                          |
+-----------+------------------------------+--------------------------+

## Wheat Consumption Stays Flat

Wheat consumption had been gradually increasing as consumers shifted
from rice to processed wheat products such as bread and pasta. However,
consumption has been flat since 2000, stemming from Japan's depressed
economy where Japanese consumers eat out less and cook more simply at
home. In 2003/04, Post estimates wheat consumption will be flat or may
increase slightly as the overall downward trend is temporarily offset
due to this year's higher price of rice. In the long term, however,
considering the growing size of the elderly population, who tend to eat
more traditional foods, it is expected that consumption will continue to
decline slowly.

## 

+-------+-------+-------+-------+-------+--------+-------+--------+
| ##    |       |       |       |       |        |       |        |
| ##### |       |       |       |       |        |       |        |
|  Tabl |       |       |       |       |        |       |        |
| e 11. |       |       |       |       |        |       |        |
|       |       |       |       |       |        |       |        |
| ####  |       |       |       |       |        |       |        |
| ### P |       |       |       |       |        |       |        |
| er Ca |       |       |       |       |        |       |        |
| pita  |       |       |       |       |        |       |        |
| Consu |       |       |       |       |        |       |        |
| mptio |       |       |       |       |        |       |        |
| n of  |       |       |       |       |        |       |        |
| Wheat |       |       |       |       |        |       |        |
|  in J |       |       |       |       |        |       |        |
| apan  |       |       |       |       |        |       |        |
+-------+-------+-------+-------+-------+--------+-------+--------+
| **    |       |       |       |       |        |       |        |
| *(Kil |       |       |       |       |        |       |        |
| ogram |       |       |       |       |        |       |        |
| s)*** |       |       |       |       |        |       |        |
+-------+-------+-------+-------+-------+--------+-------+--------+
|       |       |       |       |       |        |       |        |
+-------+-------+-------+-------+-------+--------+-------+--------+
| 1985  | 1997  | 1998  | 1999  | 2000  | 2001   | 2002  | 2003\* |
+-------+-------+-------+-------+-------+--------+-------+--------+
| 31.7  | 32.4  | 32.2  | 32.4  | 32.6  | 32.1   | 31.9  | 32.0   |
+-------+-------+-------+-------+-------+--------+-------+--------+
| So    |       |       |       |       |        |       |        |
| urce: |       |       |       |       |        |       |        |
| MAFF  |       |       |       |       |        |       |        |
+-------+-------+-------+-------+-------+--------+-------+--------+
| \* Ag |       |       |       |       |        |       |        |
| O     |       |       |       |       |        |       |        |
| ffice |       |       |       |       |        |       |        |
| est   |       |       |       |       |        |       |        |
| imate |       |       |       |       |        |       |        |
+-------+-------+-------+-------+-------+--------+-------+--------+

## Utilization Patterns

Because of Japan's stagnant economic performance, domestic production of
selected wheat products is estimated to be flat or decline slightly in
coming years. Flour millers continue to be threatened by increasing
imports of premixes (flour preparations) and semi-finished or finished
products such as frozen dough (see the following trade section.)

+------------------------------------+----------+----------+----------+
| ####### Table 12.                  |          |          |          |
|                                    |          |          |          |
| ####### Japanese Pro               |          |          |          |
| duction of Selected Wheat Products |          |          |          |
+------------------------------------+----------+----------+----------+
| ***(1,000 MT)***                   |          |          |          |
+------------------------------------+----------+----------+----------+
|                                    |          |          |          |
+------------------------------------+----------+----------+----------+
|                                    | 2001     | 2002     | 2003\*   |
+------------------------------------+----------+----------+----------+
| Wheat Flour                        | 4,607    | 4,591    | 4,580    |
+------------------------------------+----------+----------+----------+
| Bread                              | 1,272    | 1,245    | 1,250    |
+------------------------------------+----------+----------+----------+
| Noodles                            | 1,291    | 1,267    | 1,255    |
+------------------------------------+----------+----------+----------+
| Macaroni & Spaghetti               | 150      | 154      | 155      |
+------------------------------------+----------+----------+----------+
| Biscuit                            | 218      | 210      | 215      |
+------------------------------------+----------+----------+----------+
| Premix                             | 353      | 347      | 350      |
+------------------------------------+----------+----------+----------+
| \* Ag Office Estimate              |          |          |          |
+------------------------------------+----------+----------+----------+
| Source: MAFF                       |          |          |          |
+------------------------------------+----------+----------+----------+

## Government Resale Price for 2004 to Be Lowered by 0.5 Percent

## 

MAFF controls both producer and resale prices for both domestic and
imported wheat. MAFF buys imported wheat at international prices and
sells it to domestic flour millers at higher prices. As shown in table
13 below, the ratio in recent years has been around 2.0, which means
MAFF sells imported wheat at twice the purchase price. On the other
hand, MAFF buys domestic wheat at a high price and sells it to domestic
flour millers at a significantly lower price, lower than imported wheat
so that the lower quality domestic wheat will be accepted. Revenues from
transactions for imported wheat are used to help cover the cost
difference between the purchase and resale of domestic wheat. This is
referred to as the "Cost Pool System". In recent years, flour millers
have been vocal in demanding lower resale prices for both domestic and
imported wheat because of the increasing competition from surging
imports of flour preparations, semi-processed and frozen dough products.
In response MAFF finally agreed to lower the resale price by 0.5 percent
for JFY 2004.

+-------+---------+---+----------+--------+-----------+----+---+--------+
| ##    |         |   |          |        |           |    |   |        |
| ##### |         |   |          |        |           |    |   |        |
|  Tabl |         |   |          |        |           |    |   |        |
| e 13. |         |   |          |        |           |    |   |        |
|       |         |   |          |        |           |    |   |        |
| ##### |         |   |          |        |           |    |   |        |
| ## GO |         |   |          |        |           |    |   |        |
| J Pur |         |   |          |        |           |    |   |        |
| chase |         |   |          |        |           |    |   |        |
|  and  |         |   |          |        |           |    |   |        |
| Resal |         |   |          |        |           |    |   |        |
| e Pri |         |   |          |        |           |    |   |        |
| ces f |         |   |          |        |           |    |   |        |
| or Do |         |   |          |        |           |    |   |        |
| mesti |         |   |          |        |           |    |   |        |
| c and |         |   |          |        |           |    |   |        |
|  Impo |         |   |          |        |           |    |   |        |
| rted  |         |   |          |        |           |    |   |        |
| Wheat |         |   |          |        |           |    |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
| **    |         |   |          |        |           |    |   |        |
| *(Yen |         |   |          |        |           |    |   |        |
| per   |         |   |          |        |           |    |   |        |
| M     |         |   |          |        |           |    |   |        |
| T)*** |         |   |          |        |           |    |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
|       |         |   |          |        |           |    |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
|       | D       |   |          |        | Imported  |    |   |        |
|       | omestic |   |          |        | Wheat     |    |   |        |
|       | Wheat   |   |          |        |           |    |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
|       | P       |   | Resale   |        | Average   | Re |   |        |
|       | urchase |   |          |        | CIF       | sa |   |        |
|       |         |   |          |        |           | le |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
|       | Price   |   | Price    | (      | Price \*  | P  |   | (      |
|       | (a)     |   | (b)      | a)/(b) | (a)       | ri |   | b)/(a) |
|       |         |   |          |        |           | ce |   |        |
|       |         |   |          |        |           | \* |   |        |
|       |         |   |          |        |           | \* |   |        |
|       |         |   |          |        |           | (  |   |        |
|       |         |   |          |        |           | b) |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
| 2001  | 144,883 |   | 38,460   | 3.8    | 22,312    | 43 |   | 2.0    |
|       |         |   |          |        |           | ,6 |   |        |
|       |         |   |          |        |           | 10 |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
| 2002  | 144,883 |   | 38,460   | 3.8    | 22,079    | 43 |   | 2.0    |
|       |         |   |          |        |           | ,6 |   |        |
|       |         |   |          |        |           | 10 |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
| 2003  | 142,533 |   | 38,460   | 3.7    | 20,399    | 43 |   | 2.1    |
|       |         |   |          |        |           | ,6 |   |        |
|       |         |   |          |        |           | 10 |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
| 2004  | 138,433 |   | 38,260   | 3.6    | NA        | NA |   | NA     |
+-------+---------+---+----------+--------+-----------+----+---+--------+
| \* US |         |   |          |        |           |    |   |        |
| Wheat |         |   |          |        |           |    |   |        |
| (HS   |         |   |          |        |           |    |   |        |
| Code: |         |   |          |        |           |    |   |        |
| 10019 |         |   |          |        |           |    |   |        |
| 0019) |         |   |          |        |           |    |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
| \*\*  |         |   |          |        |           |    |   |        |
| US    |         |   |          |        |           |    |   |        |
| We    |         |   |          |        |           |    |   |        |
| stern |         |   |          |        |           |    |   |        |
| White |         |   |          |        |           |    |   |        |
| Wheat |         |   |          |        |           |    |   |        |
| II    |         |   |          |        |           |    |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+
| So    |         |   |          |        |           |    |   |        |
| urce: |         |   |          |        |           |    |   |        |
| MAFF  |         |   |          |        |           |    |   |        |
| and   |         |   |          |        |           |    |   |        |
| Min   |         |   |          |        |           |    |   |        |
| istry |         |   |          |        |           |    |   |        |
| of    |         |   |          |        |           |    |   |        |
| Fi    |         |   |          |        |           |    |   |        |
| nance |         |   |          |        |           |    |   |        |
+-------+---------+---+----------+--------+-----------+----+---+--------+

## Wheat Imports Drop but Not to the Extent the Import Statistics Show

Unusually high carry over stocks in CY 2002 skewed CY 2003 imports down
approximately 200,000 to 300,000 metric tons. Total wheat imports in CY
2003 dropped 10.5 percent from the previous year. The decline is
attributed to the following four main factors: 1) An overall drop in per
capita wheat consumption, 2) An increase in imports of processed wheat
products, 3) An increase in domestic production, and 4) Restrained
imports in the first part of 2003 due to large stocks (MAFF imported
larger than normal amounts in the last few months of 2002, probably to
take advantage of economic factors such as favorable prices or freight
rates). Without the stock adjustment factor, CY 2003 imports would have
been 200,000 to 300,000 metric tons higher. While the stock situation
was not normal, the drop in consumption and increased imports of
processed products will continue to reduce import demand over the medium
term. This trend can be seen more clearly by looking at the marketing
year import data (July-June) where total imports have been declining
from 5.728 million MT in MY 2001 to 5.669 million MT in MY 2002 and
5.391 MT in MY 2003.

The U.S. share of total imports in 2003 was maintained at the previous
year's level. With abundant harvests in all three supplying countries
this season, despite some concerns over low inventories and higher
prices, trade should be stable in 2004 (see GAIN Report #AS3051,
Australia Grain Update - January 2004 Lockup, 12/29/03); and #CA3057,
Canada Grain and Feed September Update, 9/6/03).

+----------+------------+-------+------------+-----------+-----------+
| #        |            |       |            |           |           |
| ###### T |            |       |            |           |           |
| able 14. |            |       |            |           |           |
|          |            |       |            |           |           |
| #######  |            |       |            |           |           |
| Japanese |            |       |            |           |           |
|  Wheat I |            |       |            |           |           |
| mports b |            |       |            |           |           |
| y Source |            |       |            |           |           |
+----------+------------+-------+------------+-----------+-----------+
| **       |            |       |            |           |           |
| *(MT)*** |            |       |            |           |           |
+----------+------------+-------+------------+-----------+-----------+
|          |            |       |            |           |           |
+----------+------------+-------+------------+-----------+-----------+
| Year     | U.S.       | Share | Canada     | Australia | TOTAL     |
+----------+------------+-------+------------+-----------+-----------+
| CY 2001  | 2,891,753  | 52.4% | 1,470,119  | 1,157,311 | 5,521,251 |
+----------+------------+-------+------------+-----------+-----------+
| CY 2002  | 3,304,602  | 56.4% | 1,415,823  | 1,132,643 | 5,862,826 |
+----------+------------+-------+------------+-----------+-----------+
| CY 2003  | 2,983,496  | 56.9% | 1,069,828  | 1,167,656 | 5,246,121 |
+----------+------------+-------+------------+-----------+-----------+
| Source:  |            |       |            |           |           |
| Ministry |            |       |            |           |           |
| of       |            |       |            |           |           |
| Finance  |            |       |            |           |           |
+----------+------------+-------+------------+-----------+-----------+

+------------------+-------+-------+-------+-------+-------+-------+
| ##               |       |       |       |       |       |       |
| #####  Table 15. |       |       |       |       |       |       |
|                  |       |       |       |       |       |       |
| ####             |       |       |       |       |       |       |
| ### Japanese Imp |       |       |       |       |       |       |
| orts of Processe |       |       |       |       |       |       |
| d Wheat Products |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| ***(MT)***       |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  | CY    |       | CY    |       | CY    |       |
|                  | 2001  |       | 2002  |       | 2003  |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  | Total | US    | Total | US    | Total | US    |
|                  |       | Share |       | Share |       | Share |
+------------------+-------+-------+-------+-------+-------+-------+
| Flour            | 12    | 11.4% | 13    | 9.6%  | 13    | 7.3%  |
| preparations     | 6,425 |       | 0,848 |       | 2,603 |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Pasta (excl.     | 9     | 16.5% | 10    | 18.1% | 10    | 19.5% |
| stuffed)         | 2,675 |       | 1,415 |       | 7,838 |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Biscuits         | 1     | 15.7% | 1     | 16.9% | 2     | 11.5% |
|                  | 2,920 |       | 4,755 |       | 0,647 |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Bread            | 7,326 | 52.5% | 6,927 | 38.5% | 7,944 | 38.6% |
+------------------+-------+-------+-------+-------+-------+-------+
| Source: Ministry |       |       |       |       |       |       |
| of Finance       |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+

MAFF allows flour millers to import wheat outside of MAFF's control as
long as they export an equivalent amount of wheat flour. This so-called
"free wheat" is imported at world prices (less than half of MAFF's
resale price) and is thus very profitable. This system also provides
millers with an export market for their lower quality flour, which
otherwise would have little value in the domestic market.

+-----------------------+--------------+--------------+--------------+
| ####### Table 16.     |              |              |              |
|                       |              |              |              |
| ####### Japa          |              |              |              |
| nese Exports of Wheat |              |              |              |
|  Flour by Destination |              |              |              |
+-----------------------+--------------+--------------+--------------+
| ***(MT)***            |              |              |              |
+-----------------------+--------------+--------------+--------------+
|                       |              |              |              |
+-----------------------+--------------+--------------+--------------+
| Destination           | CY 2001      | CY 2002      | CY 2003      |
+-----------------------+--------------+--------------+--------------+
| Hong Kong             | 211,695      | 198,469      | 195,051      |
+-----------------------+--------------+--------------+--------------+
| Vietnam               | 44,684       | 48,379       | 46,593       |
+-----------------------+--------------+--------------+--------------+
| Singapore             | 25,557       | 30,586       | 38,537       |
+-----------------------+--------------+--------------+--------------+
| Thailand              | 17,273       | 16,516       | 15,301       |
+-----------------------+--------------+--------------+--------------+
| United States         | 456          | 679          | 623          |
+-----------------------+--------------+--------------+--------------+
| Other                 | 21,346       | 25,251       | 22,595       |
+-----------------------+--------------+--------------+--------------+
| Total                 | 321,011      | 319,880      | 318,700      |
+-----------------------+--------------+--------------+--------------+
| Source: Ministry of   |              |              |              |
| Finance               |              |              |              |
+-----------------------+--------------+--------------+--------------+

## 

## Feed Wheat Imports through SBS System

In 1999, MAFF introduced the Simultaneous Buy and Sell (SBS) system for
imported wheat and barley for feed use. During JFY 2003, MAFF conducted
five SBS tenders, through which 68,100 MT of imported wheat was
contracted. As in 2002 Japan purchased a small amount of Ukrainian wheat
and an increased amount of Chinese wheat, due to the situations of tight
supply and high prices in the traditional suppliers. In 2004, however,
purchasing patterns should return to normal with poor harvests in
Eastern Europe and tight supply of wheat in China's domestic market
where the Chinese government is restricting the release of stocks and
exports (see GAIN Reports #CH4004, China Grain and Feed Annual Report,
2/6/2004; and #UP4004, Ukraine Grain and Feed February Update, 2/4/04.)

+----------------------------+------------------+--------------------+---+
| ####### Table 17.          |                  |                    |   |
|                            |                  |                    |   |
| ####### SBS Import         |                  |                    |   |
| s of Feed Wheat and Barley |                  |                    |   |
+----------------------------+------------------+--------------------+---+
| ***(MT)***                 |                  |                    |   |
+----------------------------+------------------+--------------------+---+
|                            |                  |                    |   |
+----------------------------+------------------+--------------------+---+
|                            | Wheat            | Barley             |   |
+----------------------------+------------------+--------------------+---+
| 1st tender                 | 11,890           | 160,000            |   |
+----------------------------+------------------+--------------------+---+
| 2nd                        | 10,610           | 160,000            |   |
+----------------------------+------------------+--------------------+---+
| 3rd                        | 9,920            | 159,920            |   |
+----------------------------+------------------+--------------------+---+
| 4th                        | 12,710           | 180,000            |   |
+----------------------------+------------------+--------------------+---+
| 5th                        | 22,970           | 190,000            |   |
+----------------------------+------------------+--------------------+---+
| Total                      | 68,100           | 849,920            |   |
+----------------------------+------------------+--------------------+---+
| Source: MAFF               |                  |                    |   |
+----------------------------+------------------+--------------------+---+

## Marketing

The US Wheat Associates has been diligently conducting activities to
maintain and enhance trade relationships between U.S. industry and
Japanese flour millers and other end users. In addition, it has embarked
on cultivating users of U.S. durum wheat. A reverse trade mission is
scheduled later this year for this particular purpose.

## Soybean Commingling in Wheat on the Watch 

Japan's Ministry of Health, Labor and Welfare (MHLW) enacted a new
requirement for labeling of allergens in April 2003. Although it is not
mandatory to label soybeans (labeling is voluntary), flour millers are
concerned that it might become a mandatory item in the near future. As a
result, MAFF has established a new specification in its purchase
contract from January 2004 for shipments in March onward that sets a
tolerance of soybean presence in wheat at 0.4 percent.

# 

# CORN

## Production

Corn production is negligible in Japan.

## Livestock Industry Shaken by BSE in U.S. and Avian Influenza Outbreak in Japan

United States imports of U.S. beef and beef products have been suspended
since December 23 (December 24, Japan time) when the first find of a BSE
infected cow was reported. Subsequently, Japan found its first case in
79 years of high-pathogenic avian influenza (AI) in Yamaguchi Prefecture
in February 2004. The disease has since spread to several other
prefectures in western Japan. Poultry supplies are being disrupted by
the disease in Japan, as well as other Asian countries that are major
suppliers of poultry products to Japan.

Logically, it would be expected that domestic livestock producers would
build up stocks to take advantage of the lack of imports. With U.S.
beef, which occupied one third of Japan's total beef consumption, absent
from the market, some replacement demand is going to chicken and pork.
The resulting small increase in animal numbers will translate into an
increased demand for feed. However, livestock numbers are not expected
to increase significantly for a variety of reasons. Japanese beef
producers have difficulty in producing the types of cuts traditionally
supplied by the US and the domestic price of calves is soaring, limiting
expansion of the domestic cattle production. With the presence of AI in
Japan, domestic poultry producers are hesitant to build up the
broiler/layer population. While pork consumption is increasing, Japanese
pork producers also face constraints. Since the majority of the
additional demand is coming from the foodservice sector that relies on
low cost supplies, imports are expected to benefit over domestic pork
due to their lower cost. While there is not expected to be any major
changes in the near future in Japan's livestock population, with so many
unknowns at this point, it is extremely difficult to make any long-term
forecasts.

+------------+--------+--------+--------+--------+--------+--------+
| #######    |        |        |        |        |        |        |
|  Table 18. |        |        |        |        |        |        |
|            |        |        |        |        |        |        |
| #######    |        |        |        |        |        |        |
|  Japanese  |        |        |        |        |        |        |
| Livestock  |        |        |        |        |        |        |
| Population |        |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
| ***(1,000  |        |        |        |        |        |        |
| heads)***  |        |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
|            |        |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+
|            | 1999   | 2000   | 2001   | 2002   | 2003   | ***%   |
|            |        |        |        |        |        | 03     |
|            |        |        |        |        |        | /99*** |
+------------+--------+--------+--------+--------+--------+--------+
| Dairy cows | 1,816  | 1,764  | 1,725  | 1,726  | 1,719  | ***94  |
|            |        |        |        |        |        | .7%*** |
+------------+--------+--------+--------+--------+--------+--------+
| Beef       | 2,842  | 2,824  | 2,806  | 2,838  | 2,804  | ***98  |
| cattle     |        |        |        |        |        | .7%*** |
+------------+--------+--------+--------+--------+--------+--------+
| Swine      | 9,879  | 9,806  | 9,788  | 9,612  | 9,725  | ***98  |
|            |        |        |        |        |        | .4%*** |
+------------+--------+--------+--------+--------+--------+--------+
| Layers     | 1      | 1      | 1      | 1      | 1      | ***95  |
|            | 43,148 | 40,365 | 39,248 | 37,718 | 37,272 | .9%*** |
+------------+--------+--------+--------+--------+--------+--------+
| Broilers   | 1      | 1      | 1      | 1      | 1      | ***96  |
|            | 07,358 | 08,410 | 06,311 | 05,658 | 03,730 | .6%*** |
+------------+--------+--------+--------+--------+--------+--------+
| Source:    |        |        |        |        |        |        |
| MAFF (as   |        |        |        |        |        |        |
| of         |        |        |        |        |        |        |
| February   |        |        |        |        |        |        |
| each year) |        |        |        |        |        |        |
+------------+--------+--------+--------+--------+--------+--------+

+----------------------+--------------+--------------+---------------+
| ####### Table 19.    |              |              |               |
|                      |              |              |               |
| ####### Impor        |              |              |               |
| ts of Meat by Origin |              |              |               |
+----------------------+--------------+--------------+---------------+
| ***(1,000 MT)***     |              |              |               |
+----------------------+--------------+--------------+---------------+
|                      |              |              |               |
+----------------------+--------------+--------------+---------------+
|                      | CY 2001      | CY 2002      | CY 2003       |
+----------------------+--------------+--------------+---------------+
| Beef, fresh/chilled  |              |              |               |
| (HS Code: 0201)      |              |              |               |
+----------------------+--------------+--------------+---------------+
| United States        | 132          | 89           | 114           |
+----------------------+--------------+--------------+---------------+
| Share                | 39.9%        | 38.0%        | 42.2%         |
+----------------------+--------------+--------------+---------------+
| Australia            | 189          | 138          | 151           |
+----------------------+--------------+--------------+---------------+
| Total                | 331          | 234          | 270           |
+----------------------+--------------+--------------+---------------+
| Beef, frozen (HS     |              |              |               |
| Code: 0202)          |              |              |               |
+----------------------+--------------+--------------+---------------+
| United States        | 179          | 137          | 153           |
+----------------------+--------------+--------------+---------------+
| Share                | 52.0%        | 54.4%        | 50.1%         |
+----------------------+--------------+--------------+---------------+
| Australia            | 135          | 92           | 133           |
+----------------------+--------------+--------------+---------------+
| Total                | 344          | 252          | 306           |
+----------------------+--------------+--------------+---------------+
| Pork,                |              |              |               |
| fresh/chilled/frozen |              |              |               |
| (HS Code: 0203)      |              |              |               |
+----------------------+--------------+--------------+---------------+
| United States        | 245          | 249          | 245           |
+----------------------+--------------+--------------+---------------+
| Share                | 34.6%        | 32.0%        | 32.6%         |
+----------------------+--------------+--------------+---------------+
| Denmark              | 213          | 240          | 220           |
+----------------------+--------------+--------------+---------------+
| Canada               | 153          | 179          | 167           |
+----------------------+--------------+--------------+---------------+
| Total                | 709          | 778          | 753           |
+----------------------+--------------+--------------+---------------+
| Poultry,             |              |              |               |
| fresh/chilled/frozen |              |              |               |
| (HS Code: 0207)      |              |              |               |
+----------------------+--------------+--------------+---------------+
| United States        | 77           | 51           | 48            |
+----------------------+--------------+--------------+---------------+
| Share                | 14.4%        | 9.5%         | 10.0%         |
+----------------------+--------------+--------------+---------------+
| China                | 194          | 119          | 64            |
+----------------------+--------------+--------------+---------------+
| Thailand             | 148          | 188          | 179           |
+----------------------+--------------+--------------+---------------+
| Brazil               | 109          | 168          | 175           |
+----------------------+--------------+--------------+---------------+
| Total                | 535          | 539          | 480           |
+----------------------+--------------+--------------+---------------+
| Source: Ministry of  |              |              |               |
| Finance              |              |              |               |
+----------------------+--------------+--------------+---------------+

## Utilization Patterns

Corn is the major ingredient used in compound and mixed feed. The
ingredient ratio is adjusted from year-to-year, depending on prices of
various grains, but the corn ratio has been fairly constant at 47--49
percent in recent years. Of the total demand for corn, about 46-47
percent comes from the poultry sector.

## Production of Feed Up Short Term but Down Long Term

The total production of compound feed in 2002 increased slightly from
2001, due primarily to the post-BSE rebound in cattle population.
(Japan's first BSE was detected in September 2001.) In JFY 2003, Post
projects a slight temporary increase in swine and cattle feed due to an
increased demand for pork and domestic beef as a result of U.S. beef and
AI outbreak in Japan. However, in the long term, downward trend in
livestock population remains strong (see Table 18.) and feed demand in
Japan is expected to decline slowly but surely.

+---------------+--------+-------+------+----------+-------+---------+
| ###           |        |       |      |          |       |         |
| ### Table 20. |        |       |      |          |       |         |
|               |        |       |      |          |       |         |
| ###           |        |       |      |          |       |         |
| ### Japanese  |        |       |      |          |       |         |
| Compound and  |        |       |      |          |       |         |
| Mixed Feed Pr |        |       |      |          |       |         |
| oduction by T |        |       |      |          |       |         |
| ype of Animal |        |       |      |          |       |         |
+---------------+--------+-------+------+----------+-------+---------+
| ***(1,000     |        |       |      |          |       |         |
| MT)***        |        |       |      |          |       |         |
+---------------+--------+-------+------+----------+-------+---------+
|               |        |       |      |          |       |         |
+---------------+--------+-------+------+----------+-------+---------+
|               | Co     |       |      |          | Mixed | Grand-  |
|               | mpound |       |      |          |       |         |
|               | Feed   |       |      |          |       |         |
+---------------+--------+-------+------+----------+-------+---------+
|               | P      | Swine | Ca   | Su       | Feed  | Total   |
|               | oultry |       | ttle | btotal\* |       |         |
+---------------+--------+-------+------+----------+-------+---------+
| JFY 2001      | 10,312 | 5,856 | 7    | 23,364   | 735   | 24,099  |
|               |        |       | ,114 |          |       |         |
+---------------+--------+-------+------+----------+-------+---------+
| JFY 2002      | 10,500 | 5,960 | 7    | 23,722   | 692   | 24,414  |
|               |        |       | ,175 |          |       |         |
+---------------+--------+-------+------+----------+-------+---------+
| JFY 2003\*\*  | 10,300 | 6,140 | 7    | 23,845   | 650   | 24,495  |
|               |        |       | ,320 |          |       |         |
+---------------+--------+-------+------+----------+-------+---------+
| \* Includes   |        |       |      |          |       |         |
| feed for      |        |       |      |          |       |         |
| other         |        |       |      |          |       |         |
| livestock     |        |       |      |          |       |         |
| animals       |        |       |      |          |       |         |
+---------------+--------+-------+------+----------+-------+---------+
| \* Ag Office  |        |       |      |          |       |         |
| preliminary   |        |       |      |          |       |         |
| estimates     |        |       |      |          |       |         |
+---------------+--------+-------+------+----------+-------+---------+
| Source: MAFF  |        |       |      |          |       |         |
+---------------+--------+-------+------+----------+-------+---------+

## Prices

The cost of imported corn, except from China, jumped significantly in
2003 due to the drastic hike in trans-Pacific freight rates caused by a
strong increase in freight demand as a result of a surge of China's
imports of iron ore.

+------------------+------------+------------+------------+-----------+
| ***Table 21.***  |            |            |            |           |
|                  |            |            |            |           |
| ***Average CIF   |            |            |            |           |
| Price of Corn    |            |            |            |           |
| for Feed by      |            |            |            |           |
| Origin***        |            |            |            |           |
+------------------+------------+------------+------------+-----------+
| ***(\$US per     |            |            |            |           |
| MT)***           |            |            |            |           |
+------------------+------------+------------+------------+-----------+
|                  |            |            |            |           |
+------------------+------------+------------+------------+-----------+
|                  | CY 2001    | CY 2002    | CY 2003    | ***%      |
|                  |            |            |            | 03/02***  |
+------------------+------------+------------+------------+-----------+
| United States    | 116.8      | 118.6      | 138.1      | ***       |
|                  |            |            |            | 116.4%*** |
+------------------+------------+------------+------------+-----------+
| Argentina        | 111.6      | 107.5      | 137.9      | ***       |
|                  |            |            |            | 128.3%*** |
+------------------+------------+------------+------------+-----------+
| China            | 120.6      | 124.1      | 130.2      | ***       |
|                  |            |            |            | 104.9%*** |
+------------------+------------+------------+------------+-----------+
| Brazil           | 117.0      | 117.5      | 141.7      | ***       |
|                  |            |            |            | 120.6%*** |
+------------------+------------+------------+------------+-----------+
| Source: Ministry |            |            |            |           |
| of Finance       |            |            |            |           |
+------------------+------------+------------+------------+-----------+

## StarLink Issue Diminishing and Trade Relies on U.S. Supply as South American Production Expected to Decline - China Remains a Wildcard 

In December 2002, one sample of U.S. corn tested positive for the
presence of StarLink variety of biotech corn upon arrival testing. Since
this variety is not approved in Japan, imports of food corn were
disrupted to some extent. MHLW increased surveillance testing upon
arrival but has not found more positive cases. Beginning April 2003, a
new law was enacted that formally establishes a 1 percent tolerance for
the unintentional presence of such segregated unapproved products with
the condition that they are approved in other countries based on OECD
standards. (Note: MAFF does not allow the transfer of food corn detected
with StarLink to feed use.)

As production in both Argentina and Brazil is expected to decline in
2004 (see GAIN Reports #AR3042, Argentina Grain and Feed Update,
11/19/03; #BR3611; Brazil Grain and Feed Update, 8/28/03), the Japanese
trade will continue to rely on U.S. supplies despite concerns about low
stocks in the U.S. and higher prices. According to trade sources, the
Chinese government is restricting corn exports (subsidies have been has
stopped), but if the trans-Pacific freight rates do not relax, imports
from China will become increasingly attractive (see GAIN Report,
#CH4005, China Grain and Feed Annual, 2/6/04).

+-----------------------+--------------+--------------+--------------+
| ####### Table 22.     |              |              |              |
|                       |              |              |              |
| ####### Impo          |              |              |              |
| rts of Corn by Origin |              |              |              |
+-----------------------+--------------+--------------+--------------+
| ***(1,000 MT)***      |              |              |              |
+-----------------------+--------------+--------------+--------------+
|                       |              |              |              |
+-----------------------+--------------+--------------+--------------+
|                       | CY 2001      | CY 2002      | CY 2003      |
+-----------------------+--------------+--------------+--------------+
| Corn for feed         |              |              |              |
+-----------------------+--------------+--------------+--------------+
| United States         | 11,442       | 11,840       | 10,358       |
+-----------------------+--------------+--------------+--------------+
| Share                 | 95.0%        | 96.1%        | 92.7%        |
+-----------------------+--------------+--------------+--------------+
| Argentina             | 257          | 138          | 223          |
+-----------------------+--------------+--------------+--------------+
| China                 | 146          | 164          | 581          |
+-----------------------+--------------+--------------+--------------+
| Brazil                | 99           | 179          | 10           |
+-----------------------+--------------+--------------+--------------+
| Others                | 101          | 0            | 0            |
+-----------------------+--------------+--------------+--------------+
| Total                 | 12,045       | 12,321       | 11,172       |
+-----------------------+--------------+--------------+--------------+
| Corn for              |              |              |              |
| manufacturing         |              |              |              |
+-----------------------+--------------+--------------+--------------+
| United States         | 2,774        | 3,339        | 4,889        |
+-----------------------+--------------+--------------+--------------+
| Share                 | 66.4%        | 81.5%        | 82.9%        |
+-----------------------+--------------+--------------+--------------+
| Argentina             | 201          | 85           | 216          |
+-----------------------+--------------+--------------+--------------+
| Australia             | 5            | 5            | 3            |
+-----------------------+--------------+--------------+--------------+
| China                 | 219          | 116          | 571          |
+-----------------------+--------------+--------------+--------------+
| South Africa          | 625          | 168          | 21           |
+-----------------------+--------------+--------------+--------------+
| Brazil                | 335          | 374          | 184          |
+-----------------------+--------------+--------------+--------------+
| Others                | 16           | 11           | 11           |
+-----------------------+--------------+--------------+--------------+
| Total                 | 4,175        | 4,098        | 5,895        |
+-----------------------+--------------+--------------+--------------+
| Total corn            |              |              |              |
+-----------------------+--------------+--------------+--------------+
| United States         | 14,216       | 15,179       | 15,247       |
+-----------------------+--------------+--------------+--------------+
| Share                 | 87.6%        | 92.4%        | 89.3%        |
+-----------------------+--------------+--------------+--------------+
| Total                 | 16,220       | 16,419       | 17,067       |
+-----------------------+--------------+--------------+--------------+
| Source: Ministry of   |              |              |              |
| Finance               |              |              |              |
+-----------------------+--------------+--------------+--------------+

## Marketing - New Use Initiatives Continues 

With traditional markets for coarse grains expected to decline as
Japan's domestic livestock production contracts, the U.S. Grains Council
(USGC) continues to diligently explore markets for "new use" products
featuring Value Enhanced Grains (VEG) such as high oil corn. Promoting
VEG aims at increasing the total monetary value of coarse grains
exported to Japan, offsetting the forecast decline in export volume with
a long-term perspective.

# SORGHUM

## Production

Like corn, production of sorghum is negligible in Japan.

## Consumption

Sorghum is a substitute for corn in the production of compound and mixed
feeds. Therefore, the utilization rate for sorghum in these feeds
fluctuates depending on its relative price to corn and other
ingredients. In the last few years, the ratio has been declining due to
an increase in its price. In JFY 2002, the most recent year with
confirmed statistics, sorghum utilization ratio went down to about 7
percent, and is expected to decline further in JFY 2003.

+------------------+------------+------------+------------+-----------+
| #                |            |            |            |           |
| ###### Table 23. |            |            |            |           |
|                  |            |            |            |           |
| #######          |            |            |            |           |
|  Average CIF Pri |            |            |            |           |
| ce of Sorghum fo |            |            |            |           |
| r Feed by Origin |            |            |            |           |
+------------------+------------+------------+------------+-----------+
| ***(\$US per     |            |            |            |           |
| MT)***           |            |            |            |           |
+------------------+------------+------------+------------+-----------+
|                  |            |            |            |           |
+------------------+------------+------------+------------+-----------+
|                  | CY 2001    | CY 2002    | CY 2003    | ***%      |
|                  |            |            |            | 03/02***  |
+------------------+------------+------------+------------+-----------+
| United States    | 121.0      | 123.8      | 143.8      | ***       |
|                  |            |            |            | 116.2%*** |
+------------------+------------+------------+------------+-----------+
| Argentina        | 102.1      | 92.6       | 124.2      | ***       |
|                  |            |            |            | 134.1%*** |
+------------------+------------+------------+------------+-----------+
| Australia        | 113.3      | 113.1      | 150.4      | ***       |
|                  |            |            |            | 133.0%*** |
+------------------+------------+------------+------------+-----------+
| China            | 0.0        | 0.0        | 143.7      |           |
+------------------+------------+------------+------------+-----------+
| Source: Ministry |            |            |            |           |
| of Finance       |            |            |            |           |
+------------------+------------+------------+------------+-----------+

## Trade

The U.S. is the largest supplier of sorghum to Japan, followed by
Argentina. Since sorghum is mainly a substitute for corn, its potential
growth in imports largely depends on its price in relation to corn.
Overall imports declined in 2003, directly reflecting the increase in
its price. Due to continued supply limitations in Australia, the U.S.
share increased in 2002 and 2003 while China emerged as an alternative
supply source.

+-----------------------+--------------+--------------+--------------+
| ####### Table 24.     |              |              |              |
|                       |              |              |              |
| ####### Imports       |              |              |              |
|  of Sorghum by Origin |              |              |              |
+-----------------------+--------------+--------------+--------------+
| ***(1,000 MT)***      |              |              |              |
+-----------------------+--------------+--------------+--------------+
|                       |              |              |              |
+-----------------------+--------------+--------------+--------------+
|                       | CY 2001      | CY 2002      | CY 2003      |
+-----------------------+--------------+--------------+--------------+
| Sorghum for feed      |              |              |              |
+-----------------------+--------------+--------------+--------------+
| United States         | 807          | 1,087        | 866          |
+-----------------------+--------------+--------------+--------------+
| Share                 | 46.4%        | 69.6%        | 73.3%        |
+-----------------------+--------------+--------------+--------------+
| Argentina             | 257          | 175          | 244          |
+-----------------------+--------------+--------------+--------------+
| Australia             | 677          | 300          | 16           |
+-----------------------+--------------+--------------+--------------+
| China                 | 0            | 0            | 56           |
+-----------------------+--------------+--------------+--------------+
| Total                 | 1,741        | 1,562        | 1,182        |
+-----------------------+--------------+--------------+--------------+
| Sorghum, others       |              |              |              |
+-----------------------+--------------+--------------+--------------+
| United States         | 72           | 110          | 185          |
+-----------------------+--------------+--------------+--------------+
| Share                 | 43.4%        | 53.1%        | 59.7%        |
+-----------------------+--------------+--------------+--------------+
| Argentina             | 69           | 55           | 115          |
+-----------------------+--------------+--------------+--------------+
| Australia             | 24           | 42           | 1            |
+-----------------------+--------------+--------------+--------------+
| China                 | 0            | 0            | 8            |
+-----------------------+--------------+--------------+--------------+
| Others                | 1            | 0            | 1            |
+-----------------------+--------------+--------------+--------------+
| Total                 | 166          | 207          | 310          |
+-----------------------+--------------+--------------+--------------+
| Total sorghum         |              |              |              |
+-----------------------+--------------+--------------+--------------+
| United States         | 879          | 1,197        | 1,051        |
+-----------------------+--------------+--------------+--------------+
| Share                 | 46.1%        | 67.7%        | 70.4%        |
+-----------------------+--------------+--------------+--------------+
| Total                 | 1,907        | 1,769        | 1,492        |
+-----------------------+--------------+--------------+--------------+
| Source: Ministry of   |              |              |              |
| Finance               |              |              |              |
+-----------------------+--------------+--------------+--------------+

# BARLEY

## Production

According to MAFF's survey for the 2003 barley crop, the crop area
declined slightly at 1.4 percent. Production was down 8.6 percent from
2002 due to the affects of the cool summer and rain at the harvest time.
Like wheat, production of barley is strongly encouraged under the rice
crop diversion program. Post projects 2004 planted area will remain at
64,000 -- 65,000 hectare range with production increasing to 240,000 MT
level, given a normal yield.

+-------------+---------------------------+----------------------------+
| ######      |                           |                            |
| # Table 25. |                           |                            |
|             |                           |                            |
| #######     |                           |                            |
|  Crop Area  |                           |                            |
| and Product |                           |                            |
| ion of Barl |                           |                            |
| ey in Japan |                           |                            |
+-------------+---------------------------+----------------------------+
|             |                           |                            |
+-------------+---------------------------+----------------------------+
|             | Crop Area                 | Production                 |
+-------------+---------------------------+----------------------------+
|             | (hectares)                | (1,000 MT)                 |
+-------------+---------------------------+----------------------------+
| 1999        | 52,000                    | 205,300                    |
+-------------+---------------------------+----------------------------+
| 2000        | 53,500                    | 214,300                    |
+-------------+---------------------------+----------------------------+
| 2001        | 60,540                    | 206,400                    |
+-------------+---------------------------+----------------------------+
| 2002        | 64,490                    | 217,200                    |
+-------------+---------------------------+----------------------------+
| 2003        | 63,600                    | 198,500                    |
+-------------+---------------------------+----------------------------+
| Source:     |                           |                            |
| MAFF        |                           |                            |
+-------------+---------------------------+----------------------------+

# 

## Consumption

In Japan, over 80 percent of the total domestic consumption of barley is
used for compound and mixed feed production for the cattle sector (beef
and dairy). Barley is particularly important in feeding beef cattle
because it produces high quality beef with the white marbling Japanese
consumers favor. The largest non-feed uses are for the production for
*shochu*, a traditionally distilled liquor, and beer. Other uses include
*miso* (soybean paste) and barley tea.

# 

## Prices

After reaching record high levels in 1996, the average CIF price of
barley declined until 1999, rebounded in 2000 and has been reaching
higher levels since.

+------------------+------------+------------+------------+-----------+
| #                |            |            |            |           |
| ###### Table 26. |            |            |            |           |
|                  |            |            |            |           |
| #######          |            |            |            |           |
|  Average CIF Pri |            |            |            |           |
| ces of Barley fo |            |            |            |           |
| r Feed by Origin |            |            |            |           |
+------------------+------------+------------+------------+-----------+
| ***(\$US per     |            |            |            |           |
| MT)***           |            |            |            |           |
+------------------+------------+------------+------------+-----------+
|                  |            |            |            |           |
+------------------+------------+------------+------------+-----------+
|                  | CY 2001    | CY 2002    | CY 2003    | ***%      |
|                  |            |            |            | 03/02***  |
+------------------+------------+------------+------------+-----------+
| United States    | 142.2      | 142.1      | 169.8      | ***       |
|                  |            |            |            | 119.5%*** |
+------------------+------------+------------+------------+-----------+
| Canada           | 140.5      | 139.1      | 164.0      | ***       |
|                  |            |            |            | 117.9%*** |
+------------------+------------+------------+------------+-----------+
| Australia        | 144.2      | 139.8      | 172.0      | ***       |
|                  |            |            |            | 123.0%*** |
+------------------+------------+------------+------------+-----------+
| Ukraine          | NA         | 122.2      | 143.3      | ***       |
|                  |            |            |            | 117.3%*** |
+------------------+------------+------------+------------+-----------+
| Source: Ministry |            |            |            |           |
| of Finance       |            |            |            |           |
+------------------+------------+------------+------------+-----------+

# 

# 

## Trade

Along with rice and wheat, barley imports are controlled by MAFF as a
"Staple Food". Even though the import system mimics the free market
principle fairly closely, MAFF is hesitant to remove barley from the
state system because it is a strategic alternative crop under the rice
crop diversion program (see GAIN Report, #JA3058, Grain and Feed --
Japan's Barley Policy, 8/22/03.)

Due to tight supplies and higher prices from traditional suppliers,
Japan imported a small amount of barley from the Ukraine in 2002 for the
first time in many years. In 2003 purchases from the Ukraine increased
and Germany also emerged as a supplier. However, according to trade
sources, imports in 2004 should return to traditional supply sources
because of the expected decline in production in Eastern Europe and a
bumper crop in Australia (see GAIN Reports, #UP4004, Ukraine Grain and
Feed February Update, 2/4/04; and #AS3051, Australia Grain and Feed
Update, 12/29/03.)

+------------------------+--------------+--------------+--------------+
| ####### Table 27.      |              |              |              |
|                        |              |              |              |
| ####### Impor          |              |              |              |
| ts of Barley by Origin |              |              |              |
+------------------------+--------------+--------------+--------------+
| ***(1,000 MT)***       |              |              |              |
+------------------------+--------------+--------------+--------------+
|                        |              |              |              |
+------------------------+--------------+--------------+--------------+
|                        | CY 2001      | CY 2002      | CY 2003      |
+------------------------+--------------+--------------+--------------+
| Barley for feed        |              |              |              |
+------------------------+--------------+--------------+--------------+
| United States          | 504          | 307          | 406          |
+------------------------+--------------+--------------+--------------+
| Share                  | 43.0%        | 27.2%        | 33.8%        |
+------------------------+--------------+--------------+--------------+
| Canada                 | 140          | 14           | 83           |
+------------------------+--------------+--------------+--------------+
| Australia              | 529          | 775          | 487          |
+------------------------+--------------+--------------+--------------+
| Ukraine                | 0            | 30           | 91           |
+------------------------+--------------+--------------+--------------+
| Germany                | 0            | 0            | 132          |
+------------------------+--------------+--------------+--------------+
| Others                 | 0            | 1            | 2            |
+------------------------+--------------+--------------+--------------+
| Total                  | 1,173        | 1,127        | 1,201        |
+------------------------+--------------+--------------+--------------+
| Barley, others         |              |              |              |
+------------------------+--------------+--------------+--------------+
| United States          | 9            | 22           | 7            |
+------------------------+--------------+--------------+--------------+
| Share                  | 3.8%         | 9.8%         | 2.9%         |
+------------------------+--------------+--------------+--------------+
| Canada                 | 42           | 17           | 21           |
+------------------------+--------------+--------------+--------------+
| Australia              | 186          | 186          | 212          |
+------------------------+--------------+--------------+--------------+
| Others                 | 1            | 0            | 1            |
+------------------------+--------------+--------------+--------------+
| Total                  | 238          | 225          | 241          |
+------------------------+--------------+--------------+--------------+
| Total Barley           |              |              |              |
+------------------------+--------------+--------------+--------------+
| United States          | 513          | 329          | 413          |
+------------------------+--------------+--------------+--------------+
| Share                  | 36.4%        | 24.3%        | 28.6%        |
+------------------------+--------------+--------------+--------------+
| Total                  | 1,411        | 1,352        | 1,442        |
+------------------------+--------------+--------------+--------------+
| Source: Ministry of    |              |              |              |
| Finance                |              |              |              |
+------------------------+--------------+--------------+--------------+

## SBS Tender for Feed Barley since 1999

As noted in the Wheat Section of this report, MAFF introduced the
Simultaneous Buy and Sell (SBS) system for barley for feed in JFY 1999.
During JFY 1999, 359,940 MT of feed barley was contracted under three
tenders. The amount has been raised every year to 850,000 MT in JFY
2002, remained at that level for 2003, and will be raised again in JFY
2004 to 900,000 MT.

+------------------------------+-----------------+-------------------+---+
| ####### Table 28.            |                 |                   |   |
|                              |                 |                   |   |
| ####### SBS Impo             |                 |                   |   |
| rts of Feed Wheat and Barley |                 |                   |   |
+------------------------------+-----------------+-------------------+---+
| ***(MT)***                   |                 |                   |   |
+------------------------------+-----------------+-------------------+---+
|                              |                 |                   |   |
+------------------------------+-----------------+-------------------+---+
|                              | Wheat           | Barley            |   |
+------------------------------+-----------------+-------------------+---+
| !st tender                   | 11,890          | 160,000           |   |
+------------------------------+-----------------+-------------------+---+
| 2nd                          | 10,610          | 160,000           |   |
+------------------------------+-----------------+-------------------+---+
| 3^rd^                        | 9,920           | 159,920           |   |
+------------------------------+-----------------+-------------------+---+
| 4^th^                        | 12,710          | 180,000           |   |
+------------------------------+-----------------+-------------------+---+
| 5^th^                        | 22,970          | 190,000           |   |
+------------------------------+-----------------+-------------------+---+
| Total                        | 68,100          | 849,920           |   |
+------------------------------+-----------------+-------------------+---+
| Source: MAFF                 |                 |                   |   |
+------------------------------+-----------------+-------------------+---+

# OATS

## Production

Production of oats is minimal in Japan.

## Consumption

Oats are almost exclusively used for feed in Japan. The annual oats
consumption for feed is roughly 80,000 MT. Japan imports about the same
amount of oats annually. The main users of oats are the racehorse
industry and compound feed manufacturers.

## Prices

As shown below, U.S. oats are significantly less price competitive than
those of Australia and Canada, the two major suppliers for Japan. In
2003, Australia's average CIF price of oats was nearly 40 percent less
than the U.S. average CIF price.

+------------------+------------+------------+-----------+-----------+
| #                |            |            |           |           |
| ###### Table 29. |            |            |           |           |
|                  |            |            |           |           |
| ####### Ave      |            |            |           |           |
| rage CIF Price o |            |            |           |           |
| f Oats by Origin |            |            |           |           |
+------------------+------------+------------+-----------+-----------+
| ***(\$US per     |            |            |           |           |
| MT)***           |            |            |           |           |
+------------------+------------+------------+-----------+-----------+
|                  |            |            |           |           |
+------------------+------------+------------+-----------+-----------+
|                  | CY 2001    | CY 2002    | CY 2003   | ***%      |
|                  |            |            |           | 03/02***  |
+------------------+------------+------------+-----------+-----------+
| United States    | 234.6      | 312.2      | 322.9     | ***       |
|                  |            |            |           | 103.4%*** |
+------------------+------------+------------+-----------+-----------+
| Australia        | 147.5      | 161.2      | 201.8     | ***       |
|                  |            |            |           | 125.2%*** |
+------------------+------------+------------+-----------+-----------+
| Canada           | 161.4      | 223.5      | 249.0     | ***       |
|                  |            |            |           | 111.4%*** |
+------------------+------------+------------+-----------+-----------+
| Source: Ministry |            |            |           |           |
| of Finance       |            |            |           |           |
+------------------+------------+------------+-----------+-----------+

# 

# 

## Trade

Australia and Canada dominate oat exports to the Japanese market.
Imports in 2004 are estimated to stay flat. In the medium term
perspective, a decline is expected as Japan's feed demand weakens
further.

+-----------------------+--------------+--------------+--------------+
| ###### Table 30.      |              |              |              |
|                       |              |              |              |
| ###### Impo           |              |              |              |
| rts of Oats by Origin |              |              |              |
+-----------------------+--------------+--------------+--------------+
| ***(1,000 MT)***      |              |              |              |
+-----------------------+--------------+--------------+--------------+
|                       |              |              |              |
+-----------------------+--------------+--------------+--------------+
|                       | CY 2001      | CY 2002      | CY 2003      |
+-----------------------+--------------+--------------+--------------+
| United States         | 2            | 1            | 1            |
+-----------------------+--------------+--------------+--------------+
| Australia             | 45           | 58           | 51           |
+-----------------------+--------------+--------------+--------------+
| Canada                | 37           | 24           | 21           |
+-----------------------+--------------+--------------+--------------+
| Other                 | 0            | 0            | 2            |
+-----------------------+--------------+--------------+--------------+
| Total                 | 84           | 83           | 75           |
+-----------------------+--------------+--------------+--------------+
| Source: Ministry of   |              |              |              |
| Finance               |              |              |              |
+-----------------------+--------------+--------------+--------------+

# BEANS

## Production of Both Kidney Beans and Red Beans Drop 

Small red beans (Azuki) and kidney beans account for almost all of
Japan's dry bean production. Although the production area in 2003 for
small red beans stayed at the 2002 level, production volume was down
10.8 percent, due to low summer temperatures and a deficiency in
sunlight. The production volume for kidney beans declined by 32.3
percent due to the inclement weather coupled with a 12.9 percent
reduction in production area.

+-----+---------------+----------------+---------------+--------------+
| ##  |               |                |               |              |
| ### |               |                |               |              |
| ##  |               |                |               |              |
| Tab |               |                |               |              |
| le  |               |                |               |              |
| 31. |               |                |               |              |
|     |               |                |               |              |
| ##  |               |                |               |              |
| ### |               |                |               |              |
| ##  |               |                |               |              |
| Cro |               |                |               |              |
| p A |               |                |               |              |
| rea |               |                |               |              |
|  an |               |                |               |              |
| d P |               |                |               |              |
| rod |               |                |               |              |
| uct |               |                |               |              |
| ion |               |                |               |              |
|  of |               |                |               |              |
|  Ma |               |                |               |              |
| jor |               |                |               |              |
|  Be |               |                |               |              |
| ans |               |                |               |              |
|  in |               |                |               |              |
|  Ja |               |                |               |              |
| pan |               |                |               |              |
+-----+---------------+----------------+---------------+--------------+
|     |               |                |               |              |
+-----+---------------+----------------+---------------+--------------+
|     | Small Red     |                | Kidney Beans  |              |
|     | (Azuki) Beans |                |               |              |
+-----+---------------+----------------+---------------+--------------+
|     | Area          | Production     | Area          | Production   |
|     | (Hectares)    | (MT)           | (Hectares)    | (MT)         |
+-----+---------------+----------------+---------------+--------------+
| 1   | 45,400        | 80,600         | 12,400        | 21,400       |
| 999 |               |                |               |              |
+-----+---------------+----------------+---------------+--------------+
| 2   | 43,600        | 88,200         | 12,900        | 15,300       |
| 000 |               |                |               |              |
+-----+---------------+----------------+---------------+--------------+
| 2   | 45,700        | 70,800         | 13,300        | 23,800       |
| 001 |               |                |               |              |
+-----+---------------+----------------+---------------+--------------+
| 2   | 42,000        | 65,900         | 14,700        | 34,000       |
| 002 |               |                |               |              |
+-----+---------------+----------------+---------------+--------------+
| 2   | 42,000        | 58,800         | 12,800        | 23,000       |
| 003 |               |                |               |              |
+-----+---------------+----------------+---------------+--------------+
| S   |               |                |               |              |
| our |               |                |               |              |
| ce: |               |                |               |              |
| M   |               |                |               |              |
| AFF |               |                |               |              |
+-----+---------------+----------------+---------------+--------------+

## 

## Consumption

Japan's annual bean consumption had been fairly constant at around
230,000 metric tons. However, because the stagnant domestic economy has
negatively affected the demand for traditional Japanese confections (a
major user of beans), bean consumption has been declining to 200,000 --
220,000 MT level in the last few years. It is expected to remain flat or
decline slightly over the next few years.

+-----------+---------+---------+--------+--------+--------+-------+
| ####### T |         |         |        |        |        |       |
| able 32.  |         |         |        |        |        |       |
|           |         |         |        |        |        |       |
| ####### U |         |         |        |        |        |       |
| tilizatio |         |         |        |        |        |       |
| n of Majo |         |         |        |        |        |       |
| r Beans b |         |         |        |        |        |       |
| y Product |         |         |        |        |        |       |
+-----------+---------+---------+--------+--------+--------+-------+
| ***(Pe    |         |         |        |        |        |       |
| rcent)*** |         |         |        |        |        |       |
+-----------+---------+---------+--------+--------+--------+-------+
|           |         |         |        |        |        |       |
+-----------+---------+---------+--------+--------+--------+-------+
|           | Sweet   | Candied | Cooked | Fried  | Other  | Total |
|           |         |         |        | &      |        |       |
+-----------+---------+---------+--------+--------+--------+-------+
|           | Bean    | Beans & | Beans  | R      | (      |       |
|           |         |         |        | oasted | mainly |       |
|           |         |         |        |        | for    |       |
+-----------+---------+---------+--------+--------+--------+-------+
|           | Paste   | Other   |        | Beans  | home   |       |
|           |         | Conf.   |        |        | use)   |       |
+-----------+---------+---------+--------+--------+--------+-------+
| Small Red | 68.9    | 12.8    | 2.4    | 0.0    | 15.9   | 100.0 |
+-----------+---------+---------+--------+--------+--------+-------+
| Beans     |         |         |        |        |        |       |
+-----------+---------+---------+--------+--------+--------+-------+
| Lima &    | 66.1    | 10.2    | 15.6   | 1.1    | 7.0    | 100.0 |
+-----------+---------+---------+--------+--------+--------+-------+
| Kidney    |         |         |        |        |        |       |
| Beans     |         |         |        |        |        |       |
+-----------+---------+---------+--------+--------+--------+-------+
| Peas      | 34.5    | 9.7     | 9.2    | 30.0   | 16.6   | 100.0 |
+-----------+---------+---------+--------+--------+--------+-------+
|           |         |         |        |        |        |       |
+-----------+---------+---------+--------+--------+--------+-------+
| Broad     | 21.8    | 0.0     | 10.0   | 68.2   | 0.0    | 100.0 |
| Beans     |         |         |        |        |        |       |
+-----------+---------+---------+--------+--------+--------+-------+
|           |         |         |        |        |        |       |
+-----------+---------+---------+--------+--------+--------+-------+
| Beans &   | 60.9    | 10.5    | 9.8    | 8.0    | 10.8   | 100.0 |
+-----------+---------+---------+--------+--------+--------+-------+
| Peas      |         |         |        |        |        |       |
| Total     |         |         |        |        |        |       |
+-----------+---------+---------+--------+--------+--------+-------+
| Source:   |         |         |        |        |        |       |
| U         |         |         |        |        |        |       |
| nofficial |         |         |        |        |        |       |
| estimate  |         |         |        |        |        |       |
| by MAFF   |         |         |        |        |        |       |
+-----------+---------+---------+--------+--------+--------+-------+

# 

## Trade

Japanese total bean imports in 2003 were almost at the same volume as in
2002. Due to a reduced production of Japanese beans this season, Post
projects imports in 2004 will increase by 10,000 -- 20,000 MT.

+---------------------------+-------------+-------------+-------------+
| ####### Table 33.         |             |             |             |
|                           |             |             |             |
| ####### Japanese Major    |             |             |             |
|  Bean Imports by Supplier |             |             |             |
+---------------------------+-------------+-------------+-------------+
| ***(MT)***                |             |             |             |
+---------------------------+-------------+-------------+-------------+
|                           |             |             |             |
+---------------------------+-------------+-------------+-------------+
|                           | CY 2001     | CY 2002     | CY 2003     |
+---------------------------+-------------+-------------+-------------+
| Small Red Beans           | 24,919      | 27,931      | 29,696      |
+---------------------------+-------------+-------------+-------------+
| China                     | 22,429      | 24,787      | 26,005      |
+---------------------------+-------------+-------------+-------------+
| Canada                    | 672         | 981         | 1,567       |
+---------------------------+-------------+-------------+-------------+
| USA                       | 1,163       | 1,440       | 1,564       |
+---------------------------+-------------+-------------+-------------+
| Kidney Beans              | 20,686      | 16,945      | 16,485      |
+---------------------------+-------------+-------------+-------------+
| China                     | 7,725       | 7,499       | 4,170       |
+---------------------------+-------------+-------------+-------------+
| Canada                    | 6,466       | 5,098       | 6,992       |
+---------------------------+-------------+-------------+-------------+
| USA                       | 3,207       | 2,450       | 3,167       |
+---------------------------+-------------+-------------+-------------+
| Peas                      | 18,675      | 18,557      | 15,955      |
+---------------------------+-------------+-------------+-------------+
| Canada                    | 12,218      | 11,829      | 8,807       |
+---------------------------+-------------+-------------+-------------+
| New Zealand               | 975         | 499         | 1,449       |
+---------------------------+-------------+-------------+-------------+
| U.K.                      | 2,112       | 2,835       | 2,168       |
+---------------------------+-------------+-------------+-------------+
| USA                       | 1,741       | 977         | 998         |
+---------------------------+-------------+-------------+-------------+
| China                     | 958         | 1,385       | 1,850       |
+---------------------------+-------------+-------------+-------------+
| Hungary                   | 447         | 870         | 378         |
+---------------------------+-------------+-------------+-------------+
| Broad Beans               | 8,082       | 7,717       | 7,046       |
+---------------------------+-------------+-------------+-------------+
| China                     | 7,069       | 6,774       | 6,173       |
+---------------------------+-------------+-------------+-------------+
| Other Beans               | 37,715      | 32,716      | 33,682      |
+---------------------------+-------------+-------------+-------------+
| Total                     | 110,077     | 103,866     | 102,864     |
+---------------------------+-------------+-------------+-------------+
| Source: Ministry of       |             |             |             |
| Finance                   |             |             |             |
+---------------------------+-------------+-------------+-------------+

## Policy

With implementation of the Uruguay Round Agreement in JFY 1995, the
quota system for bean imports was replaced by a low tariff rate quota
system. A market access volume of 120,000 MT per annum is maintained
with 10 percent duty applied within the current access volume.

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# 

# PS&D {#psd-1}

## Rice PS&D Table

  ------------------ ---------- ---------- ---------- ---------- ---------- ---------- ---------
  **Commodity**      **Rice,                                     (1000                 
                     Milled**                                    HA)(1000              
                                                                 MT)                   

                     2002       Revised    2003       Estimate   2004       Forecast   UOM

                     USDA       Post       USDA       Post       USDA       Post       
                     Official   Estimate   Official   Estimate   Official   Estimate   
                     \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]    

  **Market Year                 11/2002               11/2003               11/2004    MM/YYYY
  Begin**                                                                              

  Area Harvested     1688       1688       1660       1665       0          1650       (1000 HA)

  Beginning Stocks   1594       1829       1393       1579       315        732        (1000 MT)

  Milled Production  8089       8089       7080       7091       0          7800       (1000 MT)

  Rough Production   11111      11111      9725       9740       0          10714      (1000 MT)

  MILLING RATE       7280       7280       7280       7280       0          7280       (1000 MT)
  (.9999)                                                                              

  TOTAL Imports      700        651        700        706        0          700        (1000 MT)

  Jan-Dec Imports    650        651        650        706        0          650        (1000 MT)

  Jan-Dec Import     0          321        0          321        0          325        (1000 MT)
  U.S.                                                                                 

  TOTAL SUPPLY       10383      10569      9173       9376       315        9232       (1000 MT)

  TOTAL Exports      200        200        200        200        0          200        (1000 MT)

  Jan-Dec Exports    200        200        200        200        0          200        (1000 MT)

  TOTAL Dom.         8790       8790       8658       8444       0          8300       (1000 MT)
  Consumption                                                                          

  Ending Stocks      1393       1579       315        732        0          732        (1000 MT)

  TOTAL DISTRIBUTION 10383      10569      9173       9376       0          9232       (1000 MT)
  ------------------ ---------- ---------- ---------- ---------- ---------- ---------- ---------

## 

## 

## 

## Wheat PS&D Table

  ------------------ ----------- ---------- ---------- ---------- ---------- ---------- ---------
  **PSD Table**                                                                         

  **Country**        **Japan**                                                          

  **Commodity**      **Wheat**                                    (1000                 
                                                                  HA)(1000              
                                                                  MT)                   

                     2002        Revised    2003       Estimate   2004       Forecast   UOM

                     USDA        Post       USDA       Post       USDA       Post       
                     Official    Estimate   Official   Estimate   Official   Estimate   
                     \[Old\]     \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]    

  **Market Year                  07/2002               07/2003               07/2004    MM/YYYY
  Begin**                                                                               

  Area Harvested     207         207        217        212        0          220        (1000 HA)

  Beginning Stocks   1700        1154       1606       1205       1686       1240       (1000 MT)

  Production         828         828        770        855        0          825        (1000 MT)

  TOTAL Mkt. Yr.     5579        5391       5800       5400       0          5400       (1000 MT)
  Imports                                                                               

  Jul-Jun Imports    5579        5391       5800       5400       0          5400       (1000 MT)

  Jul-Jun Import     3101        3040       0          3070       0          3080       (1000 MT)
  U.S.                                                                                  

  TOTAL SUPPLY       8107        7373       8176       7460       1686       7465       (1000 MT)

  TOTAL Mkt. Yr.     461         318        450        320        0          320        (1000 MT)
  Exports                                                                               

  Jul-Jun Exports    461         318        450        320        0          320        (1000 MT)

  Feed Dom.          350         350        350        350        0          330        (1000 MT)
  Consumption                                                                           

  TOTAL Dom.         6040        5850       6040       5900       0          5850       (1000 MT)
  Consumption                                                                           

  Ending Stocks      1606        1205       1686       1240       0          1295       (1000 MT)

  TOTAL DISTRIBUTION 8107        7373       8176       7460       0          7465       (1000 MT)
  ------------------ ----------- ---------- ---------- ---------- ---------- ---------- ---------

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## Corn PS&D Table

  ------------------ ----------- ---------- ---------- ---------- ---------- ---------- ---------
  **PSD Table**                                                                         

  **Country**        **Japan**                                                          

  **Commodity**      **Corn**                                     (1000                 
                                                                  HA)(1000              
                                                                  MT)                   

                     2002        Revised    2003       Estimate   2004       Forecast   UOM

                     USDA        Post       USDA       Post       USDA       Post       
                     Official    Estimate   Official   Estimate   Official   Estimate   
                     \[Old\]     \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]    

  **Market Year                  10/2002               10/2003               10/2004    MM/YYYY
  Begin**                                                                               

  Area Harvested     1           1          1          1          0          1          (1000 HA)

  Beginning Stocks   1393        1408       1462       1475       1463       1476       (1000 MT)

  Production         1           1          1          1          0          1          (1000 MT)

  TOTAL Mkt. Yr.     16868       16866      16500      16900      0          16800      (1000 MT)
  Imports                                                                               

  Oct-Sep Imports    16868       16866      16500      16900      0          16800      (1000 MT)

  Oct-Sep Import     14514       15397      0          15500      0          15450      (1000 MT)
  U.S.                                                                                  

  TOTAL SUPPLY       18262       18275      17963      18376      1463       18277      (1000 MT)

  TOTAL Mkt. Yr.     0           0          0          0          0          0          (1000 MT)
  Exports                                                                               

  Oct-Sep Exports    0           0          0          0          0          0          (1000 MT)

  Feed Dom.          12300       12300      12000      12400      0          12200      (1000 MT)
  Consumption                                                                           

  TOTAL Dom.         16800       16800      16500      16900      0          16700      (1000 MT)
  Consumption                                                                           

  Ending Stocks      1462        1475       1463       1476       0          1577       (1000 MT)

  TOTAL DISTRIBUTION 18262       18275      17963      18376      0          18277      (1000 MT)
  ------------------ ----------- ---------- ---------- ---------- ---------- ---------- ---------

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## Sorghum PS&D Table

  ------------------ ------------- ---------- ---------- ---------- ---------- ---------- ---------
  **PSD Table**                                                                           

  **Country**        **Japan**                                                            

  **Commodity**      **Sorghum**                                    (1000                 
                                                                    HA)(1000              
                                                                    MT)                   

                     2002          Revised    2003       Estimate   2004       Forecast   UOM

                     USDA Official Post       USDA       Post       USDA       Post       
                     \[Old\]       Estimate   Official   Estimate   Official   Estimate   
                                   \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]    

  **Market Year                    10/2002               10/2003               10/2004    MM/YYYY
  Begin**                                                                                 

  Area Harvested     0             0          0          0          0          0          (1000 HA)

  Beginning Stocks   291           290        278        281        278        281        (1000 MT)

  Production         0             0          0          0          0          0          (1000 MT)

  TOTAL Mkt. Yr.     1562          1561       1500       1500       0          1480       (1000 MT)
  Imports                                                                                 

  Oct-Sep Imports    1562          1561       1500       1500       0          1480       (1000 MT)

  Oct-Sep Import     1060          1179       0          0          0          0          (1000 MT)
  U.S.                                                                                    

  TOTAL SUPPLY       1853          1851       1778       1781       278        1761       (1000 MT)

  TOTAL Mkt. Yr.     0             0          0          0          0          0          (1000 MT)
  Exports                                                                                 

  Oct-Sep Exports    0             0          0          0          0          0          (1000 MT)

  Feed Dom.          1575          1570       1500       1500       0          1480       (1000 MT)
  Consumption                                                                             

  TOTAL Dom.         1575          1570       1500       1500       0          1480       (1000 MT)
  Consumption                                                                             

  Ending Stocks      278           281        278        281        0          281        (1000 MT)

  TOTAL DISTRIBUTION 1853          1851       1778       1781       0          1761       (1000 MT)
  ------------------ ------------- ---------- ---------- ---------- ---------- ---------- ---------

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## Barley PS&D Table

  ------------------ ------------ ---------- ---------- ---------- ---------- ---------- ---------
  **PSD Table**                                                                          

  **Country**        **Japan**                                                           

  **Commodity**      **Barley**                                    (1000                 
                                                                   HA)(1000              
                                                                   MT)                   

                     2002         Revised    2003       Estimate   2004       Forecast   UOM

                     USDA         Post       USDA       Post       USDA       Post       
                     Official     Estimate   Official   Estimate   Official   Estimate   
                     \[Old\]      \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]    

  **Market Year                   10/2002               10/2003               10/2004    MM/YYYY
  Begin**                                                                                

  Area Harvested     64           64         65         64         0          65         (1000 HA)

  Beginning Stocks   630          1026       646        983        596        922        (1000 MT)

  Production         217          217        250        199        0          240        (1000 MT)

  TOTAL Mkt. Yr.     1399         1340       1300       1370       0          1370       (1000 MT)
  Imports                                                                                

  Oct-Sep Imports    1399         1340       1300       1370       0          1370       (1000 MT)

  Oct-Sep Import     309          337        0          360        0          360        (1000 MT)
  U.S.                                                                                   

  TOTAL SUPPLY       2246         2583       2196       2552       596        2532       (1000 MT)

  TOTAL Mkt. Yr.     0            0          0          0          0          0          (1000 MT)
  Exports                                                                                

  Oct-Sep Exports    0            0          0          0          0          0          (1000 MT)

  Feed Dom.          1300         1300       1300       1330       0          1300       (1000 MT)
  Consumption                                                                            

  TOTAL Dom.         1600         1600       1600       1630       0          1600       (1000 MT)
  Consumption                                                                            

  Ending Stocks      646          983        596        922        0          932        (1000 MT)

  TOTAL DISTRIBUTION 2246         2583       2196       2552       0          2532       (1000 MT)
  ------------------ ------------ ---------- ---------- ---------- ---------- ---------- ---------

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## Oats PS&D Table

  ------------------ ----------- ---------- ---------- ---------- ---------- ---------- ---------
  **PSD Table**                                                                         

  **Country**        **Japan**                                                          

  **Commodity**      **Oats**                                     (1000                 
                                                                  HA)(1000              
                                                                  MT)                   

                     2002        Revised    2003       Estimate   2004       Forecast   UOM

                     USDA        Post       USDA       Post       USDA       Post       
                     Official    Estimate   Official   Estimate   Official   Estimate   
                     \[Old\]     \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]    

  **Market Year                  10/2002               10/2003               10/2004    MM/YYYY
  Begin**                                                                               

  Area Harvested     1           1          1          1          0          1          (1000 HA)

  Beginning Stocks   8           1          8          3          10         4          (1000 MT)

  Production         2           1          2          1          0          1          (1000 MT)

  TOTAL Mkt. Yr.     83          83         85         84         0          83         (1000 MT)
  Imports                                                                               

  Oct-Sep Imports    83          83         85         84         0          83         (1000 MT)

  Oct-Sep Import     1           1          0          2          0          0          (1000 MT)
  U.S.                                                                                  

  TOTAL SUPPLY       93          85         95         88         10         88         (1000 MT)

  TOTAL Mkt. Yr.     0           0          0          0          0          0          (1000 MT)
  Exports                                                                               

  Oct-Sep Exports    0           0          0          0          0          0          (1000 MT)

  Feed Dom.          80          76         80         78         0          77         (1000 MT)
  Consumption                                                                           

  TOTAL Dom.         85          82         85         84         0          83         (1000 MT)
  Consumption                                                                           

  Ending Stocks      8           3          10         4          0          5          (1000 MT)

  TOTAL DISTRIBUTION 93          85         95         88         0          88         (1000 MT)
  ------------------ ----------- ---------- ---------- ---------- ---------- ---------- ---------

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## Beans PS&D Table

  ------------------ ----------- ---------- ---------- ---------- ---------- ---------- ---------
  **PSD Table**                                                                         

  **Country**        **Japan**                                                          

  **Commodity**      **Beans**                                    (1000                 
                                                                  HA)(1000              
                                                                  MT)                   

                     2002        Revised    2003       Estimate   2004       Forecast   UOM

                     USDA        Post       USDA       Post       USDA       Post       
                     Official    Estimate   Official   Estimate   Official   Estimate   
                     \[Old\]     \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]    

  **Market Year                  10/2002               10/2003               10/2004    MM/YYYY
  Begin**                                                                               

  Area Harvested     0           57         0          55         0          57         (1000 HA)

  Beginning Stocks   0           40         0          22         0          9          (1000 MT)

  Production         0           100        0          82         0          100        (1000 MT)

  TOTAL Mkt. Yr.     0           107        0          125        0          110        (1000 MT)
  Imports                                                                               

  Jul-Jun Imports    0           107        0          125        0          110        (1000 MT)

  Jul-Jun Import     0           16         0          19         0          18         (1000 MT)
  U.S.                                                                                  

  TOTAL SUPPLY       0           247        0          229        0          219        (1000 MT)

  TOTAL Mkt. Yr.     0           0          0          0          0          0          (1000 MT)
  Exports                                                                               

  Jul-Jun Exports    0           0          0          0          0          0          (1000 MT)

  Feed Dom.          0           0          0          0          0          0          (1000 MT)
  Consumption                                                                           

  TOTAL Dom.         0           225        0          220        0          215        (1000 MT)
  Consumption                                                                           

  Ending Stocks      0           22         0          9          0          4          (1000 MT)

  TOTAL DISTRIBUTION 0           247        0          229        0          219        (1000 MT)
  ------------------ ----------- ---------- ---------- ---------- ---------- ---------- ---------

#