Required Report - public distribution

**Date:** 3/22/2005

**GAIN Report Number:** JA5014

JA5014

**Japan**

**Sugar**

**Annual Report**

**2005**

**Approved by:**

![](media/image1.wmf)Richard Battaglia

U. S. Embassy

**Prepared by:**

Tetsuo Hamamoto

**Report Highlights:**

Domestic sugar production is forecast at 921,000 tons in 2004/2005, up
from 896,000 tons the year before. Imports are expected to remain
relatively unchanged. Total demand for sugar in 2004/2005 is forecast to
be 2.263 million tons. Sugar demand remains almost at the same level in
the last several years (2.300 million tons in 1999). Retail sugar prices
have increased around 10 % during the past year because of increase of
contribution to the government guaranteed price system from the sugar
refinery industry.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Tokyo \[JA1\]

\[JA\]

Table of Contents

[Summary of Situation 3](#summary-of-situation)

[Statistical Tables 4](#statistical-tables)

[PSD Table -- Centrifugal Sugar 4](#psd-table-centrifugal-sugar)

[PSD Table -- Sugar Beets 5](#psd-table-sugar-beets)

[PSD Table -- Sugar Cane for Centrifugal
6](#psd-table-sugar-cane-for-centrifugal)

[Import Trade Matrix -- Centrifugal Sugar
7](#import-trade-matrix-centrifugal-sugar)

[Prices Table -- Centrifugal Sugar 8](#prices-table-centrifugal-sugar)

# Summary of Situation

The Ministry of Agriculture, Forestry and Fisheries (MAFF) estimates
centrifugal sugar production for the October-September Marketing Year
(MY) 2004/2005 at 921,000 tons, almost the same level as the year
before. The production of beet sugar is expected to be higher due to
favorable weather conditions. Cane sugar production is expected to
decrease slightly to 134,000 tons, due to a hit of a series of typhoons
in the producing area. Japan's sugar consumption is forecast to increase
slightly in 2004/2005 to 2.263 million tons, compared to the previous
years' level (2.237 million tons).

Sugar demand declined almost 10 % between 1991 and 1999 (2.611 million
tons and 2.300 in 1991 and 1999, respectively), partly due to consumers'
preference for "non-sugar" or "less sugar" products as well as the
increasing availability of sugar substitutes such as sorbitol. Sorbitol
preparation imports increased significantly during the same period
(13,651 tons and 128,387 tons in 1991 and 1999, respectively), which
mirror the decrease in sugar demand for the same period. Since 2000,
sugar demand has remained steady at 2.300 to 2.263 million tons. During
the same period, total sorbitol preparation (HS2106.510) and other
preparation (HS2106.590) have remained around 125,000 tons.

The Japanese Government abolished the 10 yen per kilogram tariff on raw
sugar in April 2000. To protect the sugar producers, MAFF, through the
Agriculture and Livestock Industries Promotion Corporation (ALIC),
subsidizes domestic production through a generous price support system.
Each year, ALIC sets a guaranteed price for domestic beet and cane
producers. ALIC then sets a price at which it will buy raw sugar from
refiners that will allow the refiners to pay the guaranteed price for
beets and cane. MAFF purchases sugar at the set price, then resells the
sugar to the refiners at a lower price, which is roughly equivalent to
the import price.

In 2004, MAFF increased the sugar refinery industry contribution to the
guaranteed price support system by 10 yen per kilogram of imported raw
sugar. The industry's total increase of contribution would amount to 200
billion yen (2 billion USD at a rate of 100 yen per 1 USD). Although the
consolidation and restructuring of the sugar refinery industry is on
going, such as recent (2001) merger of two major refinery companies;
Mitsui Sugar Refinery and Shin Meitou Sugar Refinery, and closure of a
number of plants in the past couple of years, the refinery industry had
to increase the refined sugar price from 122 yen/kg in September 2004 to
134 yen/kg in December 2005.

# Statistical Tables

## PSD Table -- Centrifugal Sugar

  ----------------- --------------- ---------- ---------- ---------- ---------- ---------- ---------
  **Commodity**     **Sugar,                                         (1000 MT)             
                    Centrifugal**                                                          

                    2004            Revised    2005       Estimate   2006       Forecast   UOM

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

  **Market Year                     10/2003               10/2004               10/2005    MM/YYYY
  Begin**                                                                                  

  Beginning Stocks  359             359        387        354        399        423        (1000 MT)

  Beet Sugar        741             743        700        787        0          750        (1000 MT)
  Production                                                                               

  Cane Sugar        147             153        150        134        0          140        (1000 MT)
  Production                                                                               

  TOTAL Sugar       888             896        850        921        0          890        (1000 MT)
  Production                                                                               

  Raw Imports       1440            1362       1460       1429       0          1400       (1000 MT)

  Refined Imp.(Raw  2               2          2          2          0          2          (1000 MT)
  Val)                                                                                     

  TOTAL Imports     1442            1364       1462       1431       0          1402       (1000 MT)

  TOTAL SUPPLY      2689            2619       2699       2706       399        2715       (1000 MT)

  Raw Exports       0               0          0          0          0          0          (1000 MT)

  Refined Exp.(Raw  10              18         10         10         0          10         (1000 MT)
  Val)                                                                                     

  TOTAL EXPORTS     10              18         10         10         0          10         (1000 MT)

  Human Dom.        2292            2237       2290       2263       0          2250       (1000 MT)
  Consumption                                                                              

  Other             0               0          0          0          0          0          (1000 MT)
  Disappearance                                                                            

  Total             2292            2247       2290       2273       0          2260       (1000 MT)
  Disappearance                                                                            

  Ending Stocks     387             354        399        423        0          445        (1000 MT)

  TOTAL             2689            2619       2699       2706       0          2715       (1000 MT)
  DISTRIBUTION                                                                             
  ----------------- --------------- ---------- ---------- ---------- ---------- ---------- ---------

## PSD Table -- Sugar Beets

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

  **Country**       **Japan**                                                          

  **Commodity**     **Sugar                                      (1000                 
                    Beets**                                      HA)(1000              
                                                                 MT)                   

                    2004        Revised    2005       Estimate   2006       Forecast   UOM

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

  **Market Year                 10/2003               10/2004               10/2005    MM/YYYY
  Begin**                                                                              

  Area Planted      66          68         68         68         0          68         (1000 HA)

  Area Harvested    66          68         68         68         0          68         (1000 HA)

  Production        3700        4161       3800       4656       0          4200       (1000 MT)

  TOTAL SUPPLY      3700        4161       3800       4656       0          4200       (1000 MT)

  Utilization for   3700        4161       3800       4656       0          4200       (1000 MT)
  Sugar                                                                                

  Utilizatn for     0           0          0          0          0          0          (1000 MT)
  Alcohol                                                                              

  TOTAL UTILIZATION 3700        4161       3800       4656       0          4200       (1000 MT)
  ----------------- ----------- ---------- ---------- ---------- ---------- ---------- ---------

##  PSD Table -- Sugar Cane for Centrifugal

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

  **Country**       **Japan**                                                              

  **Commodity**     **Sugar Cane                                     (1000                 
                    for                                              HA)(1000              
                    Centrifugal**                                    MT)                   

                    2004            Revised    2005       Estimate   2006       Forecast   UOM

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

  **Market Year                     10/2003               10/2004               10/2005    MM/YYYY
  Begin**                                                                                  

  Area Planted      31              31         31         31         0          31         (1000 HA)

  Area Harvested    24              24         24         24         0          24         (1000 HA)

  Production        1385            1388       1350       1350       0          1350       (1000 MT)

  TOTAL SUPPLY      1385            1388       1350       1350       0          1350       (1000 MT)

  Utilization for   1385            1388       1350       1350       0          1350       (1000 MT)
  Sugar                                                                                    

  Utilizatn for     0               0          0          0          0          0          (1000 MT)
  Alcohol                                                                                  

  TOTAL UTILIZATION 1385            1388       1350       1350       0          1350       (1000 MT)
  ----------------- --------------- ---------- ---------- ---------- ---------- ---------- ---------

## Import Trade Matrix -- Centrifugal Sugar

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

  **Country**          Japan                               

  **Commodity**        Sugar,                              
                       Centrifugal                         

  Time Period          CY             Units:               1000MT

  Imports for:         2003                                **2004**

  U.S.                 0              U.S.                 0

  Others                              Others               

  Australia            634            Thailand             707

  Thailand             557            Australia            465

  South Africa         163            South Africa         177

  Fiji                 54             Fiji                 23

  Brazil               34             Philippines          13

  Costa Rica           18                                  

  Total for Others     1460                                1385

  Others not Listed                                        1

  Grand Total          1460                                1386
  -------------------- -------------- -------------------- --------------

## Prices Table -- Centrifugal Sugar

  ------------------ ------------------- ---------------------- -----------
  **Country**        Japan                                      

  **Commodity**      Sugar, Centrifugal                         

  Prices in          yen                 per uom                kg

                                                                

  Year               2003                2004                   \% Change

  Jan                124                 127                    2%

  Feb                124                 127                    2%

  Mar                124                 127                    2%

  Apr                124                 128                    3%

  May                124                 130                    5%

  Jun                123                 130                    6%

  Jul                122                 130                    7%

  Aug                122                 132                    8%

  Sep                122                 132                    8%

  Oct                127                 133                    5%

  Nov                127                 133                    5%

  Dec                127                 134                    6%

                                                                

  Exchange Rate      111                 Local Currency/US \$   

  Date of Quote      9/30/2004           MM/DD/YYYY             
  ------------------ ------------------- ---------------------- -----------