Miller Magazine Issue: 122 February 2020

JAPAN 83 MILLER / FEBRUARY 2020 MY2019/20 wheat and wheat products imports to recover to 5.85 million MT with a projected increase in food wheat and wheat products imports. Under the CPTPP and Japan-EU Economic Partnership Agreement (EPA), which entered into force on December 31, 2018, and February 1, 2019, respectively, Japan lowered a mark-up on state traded wheat and wheat products imported from CPTPP and the EU member states. How- ever, due to its price competitiveness, U.S. wheat main- tained a 47 percent share in the Japanese food wheat import market between January and July 2019. CORN PRODUCTION While feed corn production is limited, Japan produced 4.5 million MT of whole crop silage corn on 94,600 ha in 2018. In July 2019, the first outbreak of fall army- worm (FAW) was confirmed in southwestern Japan and initial reports from MAFF indicate silage corn is expect- ed to bear the brunt of the outbreak. However, damage to the overall silage corn crop is expected to be limited. Due to price competitiveness, corn for feed demand remained strong and consumption is expected to rise 3.4 percent, to 12.3 million MT in MY2018/19, at the expense of sorghum, rice, wheat, and distiller’s dried grains with solubles. Reflecting bullish feed demand, MY2018/19 is expected to increase 2 percent, to 16 million MT, MY2019/20 imports are forecast to in- crease slightly to 16.05 MMT to meet a projected in- crease for cornstarch demand. US supply accounts for more than 90 percent of Japan's maize needs. Japan's largest grain import from the US is maize, with about 15 million tonnes of US maize imported in 2018. FLOUR MILLING INDUSTRY Japanese flour milling industry is dominated by four big milling companies that have a market share of around 80%. There are nearly 100 companies in the sector, operating about 120 mills, with an annual ca- pacity of over 8 million tonnes. Japanese wheat flour mills hold 2.3 months of food wheat stocks, of which the Japanese government extends financial support for storage costs for 1.8 months as a contingency. Reflect- ing solid demand, annual wheat flour production has been stable at approximately 4.7 million MT. Wheat flour is used by food manufacturers to make bread, noodles, pasta, cake, couscous, and other wheat prod- ucts. Noodles and bread are the most favorite wheat products for Japanese consumers. Japan is the third-largest packaged food market in the world after the United States and China. However, this mature sector is seeing marginal growth, a trend that is expected to continue over the coming years. Spreads and breakfast cereals are expected to see the most significant sales growth in the packaged food sector. Packaged food sales were valued at US$174.4 billion in 2017, and are anticipated to reach US$192.8 billion by 2022.