japan

U.S. Horticultural Exports to Japan

In calendar year 1999, U.S. horticultural exports to Japan grew 2 percent to reach $1.7 billion. Deciduous fruit exports grew 76 percent to almost $98 million. Dried fruit, fresh vegetables, and juice exports all rose approximately 14 percent in CY1999 leading to $47 million more in exports than in 1998. In 1999, Japan lifted phytosanitary bans on a number of apple, tomato, and cherry varieties, which will lead to increased U.S. exports in these products in the future.

U.S. Horticultural Exports to Japan Grew 2 Percent in CY1999

After a steady decline since 1996, U.S. horticultural exports to Japan were up in calendar year (CY) 1999. Total horticultural exports rose almost two percent in value to $1.7 billion. A strong yen aided this growth even though the Japanese economy was sluggish.

The U.S. market share of Japan’s horticultural market grew a fraction of a percentage last year to 26 percent, but China edged out the United States as the top supplier, with a 28 percent share of Japan’s horticultural market. France, the Philippines, and South Korea rounded out the top 5 suppliers, holding a combined market share of 20 percent. The United States still has the highest market share in fruits and nuts, at 38 percent. The Philippines comes in second at 20 percent, followed by China, a very distant third, with 10 percent. China dominates the Japanese import market for vegetables, holding a 52 percent market share. The bulk of Japanese imports from China are in the frozen and dried vegetable categories.

The U.S. horticultural export growth winners in 1999 were deciduous fruits and melons. Deciduous fruit exports to Japan rose 76 percent in value, compared with 1998, to reach $97.6 million. Volume rose 57 percent to 23,000 tons during the same period. Sweet cherry exports made up the majority of the deciduous fruit category. Melon exports rose 62 percent to reach just over $8 million. Fresh fruit exports (excluding citrus, deciduous, and melons) grew by 25 percent in value to reach $47 million, while increasing by 19 percent in quantity to 17,000 tons. Dried fruits, fresh vegetables, and juices all grew about 14 percent in 1999. These three categories gained the most in dollar terms. Dried fruit exports were up $12 million, fresh vegetables grew by $18 million, and juices grew by $17 million. Although ginseng makes up a small percentage of U.S. horticultural exports, it saw the highest percentage growth in 1999, rising 151 percent in value and 222 percent in quantity.

Hop exports rebounded in 1999, rising 24 percent in value and 53 percent in quantity. A total of 529 metric tons were exported, showing the first growth since 1995. The growth in 1999 is also very close to 1995’s high of 595 metric tons.

Miscellaneous fresh fruits and vegetables, frozen vegetables, and citrus together made up 43 percent of total U.S. horticultural exports to Japan in 1999. These three largest horticultural export categories were down slightly in terms of value last year. Miscellaneous fresh fruit and vegetable exports fell one percent to $263 million. Frozen vegetable exports were also down one percent at $259 million. The third largest export category, citrus, fell four percent to $215 million. The drop in citrus exports was mainly due to the disastrous December 1998 freeze, which hurt California orange exports.

Japan’s demand for all wines fell 31 percent in 1999. U.S. wine exports fell just 14 percent in value to $79 million, but were still the second highest ever, following the 1998 record of $92 million. France still has the highest market share for wine in Japan but their exports also fell in 1999. The suppliers with the largest growth in export value to Japan for all beverages were South Korea and China, growing 40 percent and 47 percent, respectively.

Even though Japan imported more nursery products in 1999, the U.S. share of the market fell. U.S. nursery product exports, excluding cut flowers, fell 73 percent in value and 46 percent in quantity. Japan’s top five suppliers all sent more nursery products in 1999.

U.S. exports of tree nuts and essential oils to Japan fell $14 million (12 percent) and $8 million (16 percent), respectively, in 1999, the third straight drop in export value. On average, from 1997 to 1999, tree nut exports have fallen 13 percent annually and essential oils have fallen 37 percent per year. However, tree nut and essential oil exports have remained steady in terms of quantity for the past two years, at 29,000 tons and 3,500 tons, respectively. Low prices, in both cases, can explain the decrease in dollar value exports. Tree nut prices have fallen significantly, due to record U.S. and world supplies, with almond prices falling 33 percent and walnut prices falling 36 percent since 1996.

U.S. exports of olives to Japan were down by half in quantity terms in 1999 to 550 tons, which is more in line with pre-1998 export figures. Nineteen ninety-eight was a banner year for olive exports to Japan, with exports increasing 103 percent from 1997. Export numbers from years 1993 to 1997 averaged 540 tons. In value terms, olive exports were down 15 percent to $1.7 million in 1999 but were still significantly higher than 1996 and 1997 figures.

New Market Opportunities

As our FAS Agricultural Affairs office in Tokyo reported over the past year, there are a number of significant new market opportunities for U.S. horticultural exports. Specifically, the post mentioned the potential market opportunities for apples, tomatoes, and cherries.

Apples

In 1999, the Ministry of Agriculture lifted its phytosanitary ban on five varieties of U.S. apples (Braeburn, Fuji, Gala, Granny Smith, and Jonagold). Given the size of Japan's apple market (wholesale sales exceeded $1.5 billion in 1997), and competitiveness of U.S. industry, long-term sales potential for the new varieties is considered significant. However, a major challenge for U.S. apple marketers will be to provide products that meet consumers’ high quality expectations at a competitive price. Given the difficulty in competing head-to-head with local apples, Japanese traders have suggested that the greatest competitive advantage of the U.S. apple industry may be its ability to ship numerous apple varieties not grown in Japan. While consumer acceptance of varieties such as Granny Smith, Braeburn, and Gala is unknown, willingness to try new fruit varieties is very high in Japan. Japanese traders recommend that U.S. Fuji apples be priced well below domestic Fuji apple prices in order to be competitive in Japan, due to strong consumer perceptions that local apples offer better quality and are safer (less pesticide residues) than imported product. While trader focus will be on Fuji, the other liberalized varieties (Gala, Granny Smith, Braeburn) also offer niche market potential. Since these varieties are not grown in Japan, initial curiosity is expected to be high when they are introduced to Japan. The Tokyo office estimates a $50 million market (industry estimates range from $20 to $36 million), but exports in the next couple of years may not exceed $10 million due to limitations on varieties and the high cost of the inspection program.

Cherries

In 1999, Japan’s Ministry of Agriculture also lifted its phytosanitary ban on two cherry varieties, allowing for the first sales of two late-season varieties, lapin and sweetheart. Boosted by excellent quality fruit and competitive pricing, U.S. cherry exports reached a record high in 1999, at just over 1.8 million cartons ($90 million) doubling 1998 sales. A short harvest of domestic cherries and other competing fruits also contributed to the record performance.

Tomatoes

Due to Japan’s lifting of the ban on cherry, roma, and other previously unapproved varieties of tomatoes, we can expect to see favorable conditions for U.S. tomato exports. The FAS office in Tokyo reported that sales potential is particularly good for roma tomatoes, as a substitute for canned tomatoes, in the emerging Japanese cooking tomato market. Roma tomatoes are not grown in Japan and imports of fresh cooking tomatoes from other suppliers are insignificant. Market opportunities also exist for cherry tomatoes, particularly during late Fall through early Spring when prices in Japan are relatively high.

Market Growth Opportunities

The Agricultural Affairs office in Tokyo also noted two horticultural products that have the potential for market growth in the future.

Lettuce

The demand for fresh U.S. lettuce in Japan is growing, primarily in the fast food sector. Japan’s $4.8 billion sandwich/hamburger market, with 6,800 restaurants nationwide, is growing at 5 percent to 7 percent annually. Due to the high cost of Japan’s fresh vegetables, high quality, price competitive U.S. fresh lettuce could generate significant interest in this restaurant sector. Though the Government of Japan’s phytosanitary import requirements remain strict, a potentially large, untapped market exists for fresh U.S. lettuce in Japan.

Oranges

Although oranges are not new to the Japanese market, we can expect to see a jump in exports in 2000 due to the recovery in the California orange crop. Despite bumper crops of Japanese mikans and other competing fruits this season, Japanese imports of fresh oranges are expected to rebound to normal levels in 1999/2000. Japanese production of fresh oranges continues to decline and accounts for one percent of total citrus production. Japan relies heavily on imports of fresh oranges, with California being the most important supplier. Japanese consumption of fresh oranges rises in early spring and peaks in April and May, as the taste of California oranges matures. Fruit quality, particularly Brix levels, is an important factor in Japanese fresh orange demand.

Japanese Exports to the United States Rose 16 Percent

In CY1999, the United States imported $196 million worth of horticultural products from Japan, up 16 percent or $27 million from the year before. Frozen vegetables and edible tree nuts grew the most, gaining 62 percent and 61 percent, respectively. The other vegetable categories also saw significant growth in 1999. Dried vegetables grew 30 percent to reach $15 million. Prepared vegetables went up 21 percent to $14 million. Although the potato category made up just a small percentage of all Japanese horticultural exports to the United States, it saw a 35 percent jump. Fresh vegetables saw the smallest growth of all the vegetable categories but still rose a respectable seven percent.

(The FAS Attache Report search engine contains reports from all over the world on more than 10 horticultural products. For more information on horticultural production and trade visit the H&TP website at: /htp/ . For further information on this article, contact Clarissa Valdivia at 202-720-6590.)

Last modified: Wednesday, February 20, 2002