Japan is the world’s fourth largest market for wheat, behind Egypt, Brazil, and the European Union (EU), accounting for about 5% of world trade. Since 1997-1998, wheat production has increased by 46%, to 837 thousand tonnes (kt) last year, and is currently forecast by the United States Department of Agriculture (USDA) to increase to 858 kt for 2007-2008. Despite this rise, domestic wheat production represented only 14% of domestic consumption in 2006-2007, having virtually no effect on import demand. Furthermore, the quality of Japan’s wheat is generally lower than that of Canada’s exports, therefore rising production would mostly impact demand for Australian Standard White.
For 2007-2008, wheat imports are forecast to decline marginally to 5.5 Mt. Major sources of imported wheat include the US (over 50%), Canada (25%), and Australia (20%).
Wheat consumption in Japan has fallen over the last decade, mostly due to a decline in feed use as a result of a declining livestock population. Food use is also expected to continue to decline due to an aging rural population; who tend to eat more traditional rice-based foods. Rising imports of semi-finished or finished wheat-based products – such as frozen bread and dough – is another factor displacing imports of the raw grain, but this also provides an opportunity for value-added exports.
Canadian wheat exports to Japan are generally stable. Shifts in demand are mostly indicative of supply situations in Canada and other exporting countries and export prices. No.1 Canadian Western Red Spring (CWRS) wheat is highly regarded as a top quality grain with few substitutes, ensuring strong demand. Canada’s durum wheat, No.1 Canadian Western Amber Durum (CWAD), is also preferred by Japan, with total durum imports sourced entirely from Canada. For 2007-2008, spring wheat and durum exports to Japan are forecast by Agriculture and Agri-Food Canada (AAFC) to remain stable at 1.0 and 0.2 Mt, respectively.