Required Report - public distribution

**Date:** 10/22/2004

**GAIN Report Number:** JA4077

JA9999

**Japan**

**Strawberries**

**Annual**

**2004**

**Approved by:**

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

U.S.Embassy

**Prepared by:**

Kenzo Ito

**Report Highlights:**

Japan\'s strawberry production, estimated at 205,000 metric tons in
2003, is slowing down due to labor shortage in some regions. Domestic
strawberries are mostly sold in the winter and spring, but Hokkaido
farmers start harvesting their strawberries in the summer for sale to
Japan\'s confectionary industry. The United States exported 3,900 metric
tons of fresh strawberries to Japan in 2003, down 3.8 percent from the
previous year. These were valued at \$30.34 million (CIF). The
California Strawberry Commission\'s \"summer strawberry\" campaign very
successfully promoted California strawberries in Japan\'s retail and
food service sectors. China is the leader in sales of frozen
strawberries to Japan with a 58 percent market share. The United States
exported 7,697 metric tons of frozen strawberries to Japan in 2003, down
7.2 percent from the previous year.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Tokyo \[JA1\]

\[JA\]

Table of Contents

[**Growth Trend in Japan's Strawberry Production Slowing Down
3**](#growth-trend-in-japans-strawberry-production-slowing-down)

[Summer Strawberry Production for Confectionary Use Started
3](#summer-strawberry-production-for-confectionary-use-started)

[US Fresh Strawberry Imports Stable
3](#us-fresh-strawberry-imports-stable)

["Summer Strawberry" Campaign Made a Big Hit
4](#summer-strawberry-campaign-made-a-big-hit)

[China the Leader in Japan's Frozen Strawberry Market
4](#china-the-leader-in-japans-frozen-strawberry-market)

[High Import Duties Continue to be Applied to Fresh and Frozen
Strawberries
5](#high-import-duties-continue-to-be-applied-to-fresh-and-frozen-strawberries)

[PS&D Table and Trade Matrices 6](#psd-table-and-trade-matrices)

[Fresh Strawberry PS&D Table 6](#fresh-strawberry-psd-table)

[Frozen Strawberry PS&D Table 7](#frozen-strawberry-psd-table)

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

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

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

# Growth Trend in Japan's Strawberry Production Slowing Down

![](media/image2.wmf)

Although Japan's strawberry production was growing marginally in the
last decade, its growth trend has been slowing down recently due to the
labor shortage in some regions. US Embassy, Tokyo estimates that the
Japanese production in 2003 was 205,000 metric tons, a marginal increase
from 2002 when the production declined noticeably due to the cold
temperatures in the major production region of Tochigi prefecture. The
area harvested for strawberries in 2003 is estimated at 7,100 hectares,
down approximately 2 percent from the previous year. Tochigi prefecture,
north of Tokyo, produces approximately 14 percent of the nation's
strawberries, and Fukuoka and Kumamoto prefectures in the south region
produce 10 and 7 percent, respectively. Japanese strawberry harvesting
starts in early December and continues until May, with the peak season
in February and March. The majority of Japanese strawberries are grown
in green houses and most are sweet varieties.

# Summer Strawberry Production for Confectionary Use Started

Traditionally, domestic strawberries are available in the market in the
winter and spring, while very few are available in the summer and fall.
Hokkaido farmers started summer crop strawberry production using
abandoned rice field, which was resulted from the government rice
acreage reduction program. Hokkaido summer strawberries are harvested
under a business contract with a 100% buy-out guarantee from Japan's
confectionary industry. California is a major supplier to Japan's
confectionary industry in summer. However, Japanese importers do not
anticipate that Hokkaido summer strawberries will become a major threat
to California strawberries since their production volume is so limited
and Hokkaido berry prices are twice as much as California ones. Hokkaido
farmers sold approximately \$120,000 worth of strawberries in 2003 and
plan to expand their sales to \$1 million in the near future.

# US Fresh Strawberry Imports Stable

![](media/image3.wmf)In 2003, Japanese imports of fresh strawberries
from the United States were 3,900 metric tons, down 3.8 percent from the
previous year and valued at \$30.34 million (CIF). The United States has
a market share of 95.8 percent in Japan's fresh strawberry import
market, followed by South Korea (3.8 %) and Australia (0.3 %). The
average import price of fresh US strawberries was \$7.78 per kilogram
(CIF) in 2003. US fresh strawberry sales begin in the early summer after
domestic strawberry sales are complete and continue until late fall
before the new domestic crop sales start. According to Japanese traders,
approximately 90 percent of fresh US strawberries go to Japan's
confectionary sector and the rest go to the retail sector. US
strawberries sold in Japan are largely proprietary varieties such as
Driscoll and Well-Pict.

# "Summer Strawberry" Campaign Made a Big Hit

The California Strawberry Commission, along with Japanese retailers,
launched promotions of California strawberries under the theme of
"summer strawberry". Japanese consumers are accustomed to buying
strawberries in the winter and spring. Therefore, marketing fresh
strawberries in the summer is not an easy task for Japanese retailers.
As part of the "summer strawberry" campaign, the California Strawberry
Commission conducted an in-store display contest in order to increase
the appeal of summer strawberries to Japanese consumers. Japan's major
supermarkets joined the campaign and each store promoted California
strawberries with a creative display. Often a big display was placed at
the store entrance, where there is heavy traffic. The Campaign also
featured girls who provided

samples of California strawberries for store visitors to taste. Stores
provided a leaflet of sample menus and often displayed yogurt and ice
cream beside the fresh strawberries.

Also as part of the "summer strawberry" campaign, Japan's largest
convenience store conducted a "summer strawberry" dessert fair in its
6,200 stores nationwide. Each store displayed a large banner saying,
"Summer is the Prime Season -- California Strawberries". A leaflet
explained that fresh picked strawberries are air shipped from
California. That unlike Japanese greenhouse-grown berries, California
strawberries are grown in California's fertile land with plenty of
sunshine. Strawberries are available all year round in California, and
the summer crop is good. The leaflet also explained that the berry's
vivid red color, firm flesh, and well-balanced acids provide the perfect
choice for summer desserts.

The wholesale price of California strawberries has been fairly stable
this season. In early October, US fresh strawberries were sold at
\$64.48 (7,000 yen) per 5-kilogram case, down marginally from last year,
at Tokyo's Ohta Fresh Produce Wholesale Market. US strawberries are
pre-packaged in California in a retail-size clamshell container and sold
at \$4.58 (498 yen) for a package of 6 oz (284 grams) in Tokyo
supermarkets. During supermarket sales campaigns they are often sold at
a discounted price of \$3.66 (398 yen) per pack.

# China the Leader in Japan's Frozen Strawberry Market 

![](media/image4.wmf)

Traditionally, the United States has been the number one supplier of
frozen strawberries to the Japanese market, but in the recent years
China has significantly increased its shipments of frozen strawberries
to Japan. China supplied 16,581 metric tons of frozen strawberries in
2003 which was approximately 58 percent of Japan's frozen strawberry
market. US shipments were down 7.2 percent from the previous year to
7,697 metric tons (approximately a 28 percent market share). South Korea
and Chile shipped 1,328 and 1,175 metric tons, dropping their market
shares to approximately 4.6 and 4.1 percent, respectively. China
increased their sales of frozen strawberries in Japan, mostly thanks to
their lower price. In 2003, the average import price of Chinese
strawberries was \$1.01 per kilogram (CIF), approximately one half of
the price of strawberries from the US (\$2.12 per kilogram). Imported
frozen strawberries are largely used in Japan's jam industry, where the
price of ingredients is a significant factor in the manufacturer's
ability to compete in the market, according to Japanese traders. China
produces a variety similar to the US Camarosa and Chandler varieties.
China's freezing facilities are relatively new but their product quality
has improved significantly.

# High Import Duties Continue to be Applied to Fresh and Frozen Strawberries

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

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

All duties are charged on a CIF basis.

# PS&D Table and Trade Matrices

## Fresh Strawberry PS&D Table

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

  Country       Japan                                                       

  Commodity     Strawberries,                                    (HA)(MT)   
                Fresh                                                       

                2002            Revised    2003       Estimate   2004       Forecast

                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
  Begin                                                                     

  Area Planted  7300            7230       7230       7100       0          7000

  Area          7300            7230       7230       7100       0          7000
  Harvested                                                                 

  TOTAL         209000          202900     208000     205000     0          204000
  Production                                                                

  Imports,      4497            4386       4600       4072       0          4000
  Fresh                                                                     

  TOTAL SUPPLY  213497          207286     212600     209072     0          208000

  Exports,      0               0          0          0          0          0
  Fresh                                                                     

  Domestic      209397          202886     208600     205072     0          204200
  Fresh Market                                                              

  For           4100            4400       4000       4000       0          3800
  Processing                                                                

  TOTAL         213497          207286     212600     209072     0          208000
  UTILIZATION                                                               
  ------------- --------------- ---------- ---------- ---------- ---------- ----------

## Frozen Strawberry PS&D Table

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

  Country        Japan                                                       

  Commodity      Strawberries,                                    (MT)       
                 Frozen                                                      

                 2002            Revised    2003       Estimate   2004       Forecast

                 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
  Begin                                                                      

  Deliv. To      4100            4400       4000       4000       0          3800
  Processors                                                                 

  Beginning      0               0          0          0          0          0
  Stocks                                                                     

  Production     1030            1100       1000       1000       0          950

  Imports        27711           27187      28000      28643      0          28500

  TOTAL SUPPLY   28741           28287      29000      29643      0          29450

  Exports        0               0          0          0          0          0

  Domestic       28741           28287      29000      29643      0          29450
  Consumption                                                                

  Ending Stocks  0               0          0          0          0          0

  TOTAL          28741           28287      29000      29643      0          29450
  DISTRIBUTION                                                               
  -------------- --------------- ---------- ---------- ---------- ---------- ----------

## Fresh Strawberry Import Trade Matrix

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

  Country           Japan                                

  Commodity         Strawberries,                        
                    Fresh                                

  Time Period       Oct.-Sept.        Units:             Metric Tons

  Imports for:      2002                                 2003

  U.S.              4056              U.S.               3900

  Others                              Others             

  South Korea       223               South Korea        155

  New Zealand       80                Australia          12

  Australia         27                New Zealand        5

                                                          

                                                          

                                                          

                                                          

                                                          

                                                          

                                                          

  Total for Others  330                                  172

  Others not Listed 0                                    0

  Grand Total       4386                                 4072
  ----------------- ----------------- ------------------ -----------------

## Frozen Strawberry Import Trade Matrix

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

  Country             Japan                               

  Commodity           Strawberries,                       
                      Frozen                              

  Time Period         Oct.-Sept.        Units:            Metric Tons

  Imports for:        2002                                2003

  U.S.                8298              U.S.              7697

  Others                                Others            

  China               14188             China             16581

  South Korea         1665              South Korea       1328

  Chile               1039              Chile             1175

  Mexico              708               Mexico            746

  Thailand            585               Thailand          445

  Poland              247               Poland            390

  Egypt               201               Netherlands       104

  Netherlands         136               Egypt             49

                                                           

                                                           

  Total for Others    18769                               20818

  Others not Listed   120                                 128

  Grand Total         27187                               28643
  ------------------- ----------------- ----------------- ----------------

## Fresh Strawberry Wholesale Price Table

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

  Country               Japan                             

  Commodity             Strawberries,                     
                        Fresh                             

  Prices in             Yen              per uom          KG

                                                          

  Year                  2003             2004             \% Change

  Jan                   1129             1133             0%

  Feb                   1079             1192             10%

  Mar                   979              906              -7%

  Apr                   730              632              -13%

  May                   699              744              6%

  Jun                   881              783              -11%

  Jul                   1488             1597             7%

  Aug                   2309                              -100%

  Sep                   2431                              -100%

  Oct                   2429                              -100%

  Nov                   1648                              -100%

  Dec                   1579                              -100%

                                                          

  Exchange Rate         110.05           Local            
                                         Currency/US \$   

  Date of Quote         10/1/2004        MM/DD/YYYY       
  --------------------- ---------------- ---------------- ----------------