Required Report - public distribution

**Date:** 3/18/2004

**GAIN Report Number:** JA4025

JA4024

**Japan**

**Sugar**

**Annual Report**

**2004**

**Approved by:**

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

U. S. Embassy

**Prepared by:**

Tetsuo Hamamoto

**Report Highlights:**

Domestic sugar production is forecast for 897,000 tons in 2003/2004, up
from 875,000 tons the year before. Imports are expected to remain
relatively unchanged. Total demand for sugar in 2003/2004 is forecast to
drop 0.2 % to 2.292 million tons. Sugar demand remains almost at the
same level in the last several years (2.300 million tons in 1999).

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 -- Sugar Cane for Centrifugal
7](#import-trade-matrix-sugar-cane-for-centrifugal)

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

[Export Trade Matrix -- Centrifugal Sugar
9](#export-trade-matrix-centrifugal-sugar)

[Prices Table -- Centrifugal Sugar 10](#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) 2003/2004 at 897,000 tons, down 2.5 percent from the year before.
The production of beet sugar is expected to be higher due to favorable
weather conditions. Cane sugar production is expected to increase
slightly to 147,000 tons. Japan's sugar consumption is forecast to
decrease slightly in 2003/2004 to 2.292 million tons, compared to levels
of the previous year (2.296 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 2.277 million tons.
Sorbitol imports have also remained stable around 120,000 tons.

Lower sugar prices reflect the Japanese Government's efforts to
strengthen the competitiveness of its sugar industry. The Japanese
Government abolished the 10 yen per kilogram tariff on raw sugar in
April 2000.

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.

# Statistical Tables

## PSD Table -- Centrifugal Sugar

+-----------------+------+------+------+------+------+------+-------+
| **PSD Table**   |      |      |      |      |      |      |       |
+-----------------+------+------+------+------+------+------+-------+
| **Country**     | #### |      |      |      |      |      |       |
|                 | ## J |      |      |      |      |      |       |
|                 | apan |      |      |      |      |      |       |
+-----------------+------+------+------+------+------+------+-------+
| **Commodity**   | *    |      |      |      | (    |      |       |
|                 | *Cen |      |      |      | 1000 |      |       |
|                 | trif |      |      |      | MT)  |      |       |
|                 | ugal |      |      |      |      |      |       |
|                 | Sug  |      |      |      |      |      |       |
|                 | ar** |      |      |      |      |      |       |
+-----------------+------+------+------+------+------+------+-------+
|                 | 2003 | Rev  | 2004 | Esti | 2005 | Fore | UOM   |
|                 |      | ised |      | mate |      | cast |       |
+-----------------+------+------+------+------+------+------+-------+
|                 | USDA | Post | USDA | Post | USDA | Post |       |
|                 | Offi | Esti | Offi | Esti | Offi | Esti |       |
|                 | cial | mate | cial | mate | cial | mate |       |
|                 | \[O  | \[N  | \[O  | \[N  | \[O  | \[N  |       |
|                 | ld\] | ew\] | ld\] | ew\] | ld\] | ew\] |       |
+-----------------+------+------+------+------+------+------+-------+
| **Market Year   |      | 10/  |      | 10/  |      | 10/  | MM    |
| Begin**         |      | 2002 |      | 2003 |      | 2004 | /YYYY |
+-----------------+------+------+------+------+------+------+-------+
| Beginning       | 318  | 318  | 330  | 359  | 272  | 387  | (1000 |
| Stocks          |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Beet Sugar      | 718  | 721  | 670  | 741  | 0    | 700  | (1000 |
| Production      |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Cane Sugar      | 152  | 143  | 150  | 147  | 0    | 150  | (1000 |
| Production      |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| TOTAL Sugar     | 870  | 864  | 820  | 888  | 0    | 850  | (1000 |
| Production      |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Raw Imports     | 1464 | 1480 | 1416 | 1440 | 0    | 1460 | (1000 |
|                 |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Refined         | 2    | 3    | 2    | 2    | 0    | 2    | (1000 |
| Imp.(Raw Val)   |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| TOTAL Imports   | 1466 | 1483 | 1402 | 1442 | 0    | 1462 | (1000 |
|                 |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| TOTAL SUPPLY    | 2654 | 2665 | 2552 | 2689 | 272  | 2699 | (1000 |
|                 |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Raw Exports     | 0    | 0    | 0    | 0    | 0    | 0    | (1000 |
|                 |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Refined         | 10   | 10   | 10   | 10   | 0    | 10   | (1000 |
| Exp.(Raw Val)   |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| TOTAL EXPORTS   | 10   | 10   | 10   | 10   | 0    | 10   | (1000 |
|                 |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Human Dom.      | 2314 | 2296 | 2270 | 2292 | 0    | 2290 | (1000 |
| Consumption     |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Other           | 0    | 0    | 0    | 0    | 0    | 0    | (1000 |
| Disappearance   |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Total           | 2314 | 2296 | 2270 | 2292 | 0    | 2290 | (1000 |
| Disappearance   |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Ending Stocks   | 330  | 359  | 272  | 387  | 0    | 399  | (1000 |
|                 |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| TOTAL           | 2654 | 2665 | 2552 | 2689 | 0    | 2699 | (1000 |
| DISTRIBUTION    |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+

##  PSD Table -- Sugar Beets

+-----------------+------+------+------+------+------+------+-------+
| **PSD Table**   |      |      |      |      |      |      |       |
+-----------------+------+------+------+------+------+------+-------+
| **Country**     | #### |      |      |      |      |      |       |
|                 | ## J |      |      |      |      |      |       |
|                 | apan |      |      |      |      |      |       |
+-----------------+------+------+------+------+------+------+-------+
| **Commodity**   | **S  |      |      |      | (    |      |       |
|                 | ugar |      |      |      | 1000 |      |       |
|                 | Bee  |      |      |      | HA)( |      |       |
|                 | ts** |      |      |      | 1000 |      |       |
|                 |      |      |      |      | MT)  |      |       |
+-----------------+------+------+------+------+------+------+-------+
|                 | 2003 | Rev  | 2004 | Esti | 2005 | Fore | UOM   |
|                 |      | ised |      | mate |      | cast |       |
+-----------------+------+------+------+------+------+------+-------+
|                 | USDA | Post | USDA | Post | USDA | Post |       |
|                 | Offi | Esti | Offi | Esti | Offi | Esti |       |
|                 | cial | mate | cial | mate | cial | mate |       |
|                 | \[O  | \[N  | \[O  | \[N  | \[O  | \[N  |       |
|                 | ld\] | ew\] | ld\] | ew\] | ld\] | ew\] |       |
+-----------------+------+------+------+------+------+------+-------+
| **Market Year   |      | 10/  |      | 10/  |      | 10/  | MM    |
| Begin**         |      | 2002 |      | 2003 |      | 2004 | /YYYY |
+-----------------+------+------+------+------+------+------+-------+
| Area Planted    | 67   | 67   | 66   | 68   | 0    | 68   | (1000 |
|                 |      |      |      |      |      |      | HA)   |
+-----------------+------+------+------+------+------+------+-------+
| Area Harvested  | 67   | 67   | 66   | 68   | 0    | 68   | (1000 |
|                 |      |      |      |      |      |      | HA)   |
+-----------------+------+------+------+------+------+------+-------+
| Production      | 4098 | 4098 | 3700 | 3867 | 0    | 3800 | (1000 |
|                 |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| TOTAL SUPPLY    | 4098 | 4098 | 3700 | 3867 | 0    | 3800 | (1000 |
|                 |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Utilization for | 4098 | 4098 | 3700 | 3867 | 0    | 3800 | (1000 |
| Sugar           |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Utilizatn for   | 0    | 0    | 0    | 0    | 0    | 0    | (1000 |
| Alcohol         |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| TOTAL           | 4098 | 4098 | 3700 | 3867 | 0    | 3800 | (1000 |
| UTILIZATION     |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+

##  PSD Table -- Sugar Cane for Centrifugal

+-----------------+------+------+------+------+------+------+-------+
| **PSD Table**   |      |      |      |      |      |      |       |
+-----------------+------+------+------+------+------+------+-------+
| **Country**     | #### |      |      |      |      |      |       |
|                 | ## J |      |      |      |      |      |       |
|                 | apan |      |      |      |      |      |       |
+-----------------+------+------+------+------+------+------+-------+
| **Commodity**   | **S  |      |      |      | (    |      |       |
|                 | ugar |      |      |      | 1000 |      |       |
|                 | Cane |      |      |      | HA)( |      |       |
|                 | for  |      |      |      | 1000 |      |       |
|                 | C    |      |      |      | MT)  |      |       |
|                 | entr |      |      |      |      |      |       |
|                 | ifug |      |      |      |      |      |       |
|                 | al** |      |      |      |      |      |       |
+-----------------+------+------+------+------+------+------+-------+
|                 | 2003 | Rev  | 2004 | Esti | 2005 | Fore | UOM   |
|                 |      | ised |      | mate |      | cast |       |
+-----------------+------+------+------+------+------+------+-------+
|                 | USDA | Post | USDA | Post | USDA | Post |       |
|                 | Offi | Esti | Offi | Esti | Offi | Esti |       |
|                 | cial | mate | cial | mate | cial | mate |       |
|                 | \[O  | \[N  | \[O  | \[N  | \[O  | \[N  |       |
|                 | ld\] | ew\] | ld\] | ew\] | ld\] | ew\] |       |
+-----------------+------+------+------+------+------+------+-------+
| **Market Year   |      | 10/  |      | 10/  |      | 10/  | MM    |
| Begin**         |      | 2002 |      | 2003 |      | 2004 | /YYYY |
+-----------------+------+------+------+------+------+------+-------+
| Area Planted    | 30   | 31   | 30   | 31   | 0    | 31   | (1000 |
|                 |      |      |      |      |      |      | HA)   |
+-----------------+------+------+------+------+------+------+-------+
| Area Harvested  | 24   | 24   | 23   | 24   | 0    | 24   | (1000 |
|                 |      |      |      |      |      |      | HA)   |
+-----------------+------+------+------+------+------+------+-------+
| Production      | 1400 | 1326 | 1400 | 1385 | 0    | 1350 | (1000 |
|                 |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| TOTAL SUPPLY    | 1400 | 1326 | 1400 | 1385 | 0    | 1350 | (1000 |
|                 |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Utilization for | 1400 | 1326 | 1400 | 1385 | 0    | 1350 | (1000 |
| Sugar           |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| Utilizatn for   | 0    | 0    | 0    | 0    | 0    | 0    | (1000 |
| Alcohol         |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+
| TOTAL           | 1400 | 1326 | 1400 | 1385 | 0    | 1350 | (1000 |
| UTILIZATION     |      |      |      |      |      |      | MT)   |
+-----------------+------+------+------+------+------+------+-------+

##  Import Trade Matrix -- Sugar Cane for Centrifugal

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

  **Country**          Japan                               

  **Commodity**        Sugar Cane for                      
                       Centrifugal                         

  Time Period          CY             Units:               1000MT

  Imports for:         2002                                **2003**

  U.S.                 0              U.S.                 0

  Others                              Others               

  Australia            774            Austraila            634

  Thailand             396            Thailand             557

  South Africa         187            South Africa         163

  Fiji                 57             Fiji                 54

  Brazil               46             Brazil               34

                                      Costa Rica           18

                                                           

                                                           

                                                           

                                                           

  Total for Others     1460                                1460

  Others not Listed    0                                   

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

##  Import Trade Matrix -- Centrifugal Sugar

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

  **Country**          Japan                               

  **Commodity**        Centrifugal                         
                       Sugar                               

  Time Period          CY             Units:               1000MT

  Imports for:         2002                                **2003**

  U.S.                 0              U.S.                 0

  Others                              Others               

  R. Korea             1              R. Korea             2

  Brazil               1                                   

                                                           

                                                           

                                                           

                                                           

                                                           

                                                           

                                                           

                                                           

  Total for Others     2                                   2

  Others not Listed                                        

  Grand Total          2                                   2
  -------------------- -------------- -------------------- --------------

##  Export Trade Matrix -- Centrifugal Sugar

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

  **Country**          Japan                               

  **Commodity**        Centrifugal                         
                       Sugar                               

  Time Period          CY             Units:               1000MT

  Exports for:         2002                                **2003**

  U.S.                 0              U.S.                 0

  Others                              Others               

  China                1              China                1

  Hong Kong            1              Hong Kong            1

                                                           

                                                           

                                                           

                                                           

                                                           

                                                           

                                                           

                                                           

  Total for Others     2                                   2

  Others not Listed    0                                   0

  Grand Total          2                                   2
  -------------------- -------------- -------------------- --------------

##  Prices Table -- Centrifugal Sugar

  ------------------------ --------------- --------------- ---------------
  **Prices Table**                                         

  **Country**              Japan                           

  **Commodity**            Centrifugal                     
                           Sugar                           

  Prices in                yen             per uom         kg

                                                           

  Year                     2002            2003            \% Change

  Jan                      120             124             3%

  Feb                      120             124             3%

  Mar                      122             124             2%

  Apr                      122             124             2%

  May                      121             124             2%

  Jun                      121             123             2%

  Jul                      120             122             2%

  Aug                      120             122             2%

  Sep                      120             122             2%

  Oct                      122             127             4%

  Nov                      123             127             3%

  Dec                      124             127             2%

                           110                             

  Exchange Rate                            Local           
                                           Currency/US \$  

  Date of Quote            9/30/2003       MM/DD/YYYY      
  ------------------------ --------------- --------------- ---------------