Japan’s food aid needs still unclear | TSLN.com

Japan’s food aid needs still unclear

SAN DIEGO (DTN) – Four days after the twin disasters of earthquake and tsunami struck the world’s largest agricultural importer, Japan’s suppliers are struggling to assess how food shipments will be affected.

More than 700 representatives of U.S. country elevators and grain companies gathered this week in San Diego for the National Grain and Feed Association’s annual meeting, but few could speak confidently about how much trade will be disrupted by the catastrophe or exactly what repercussions could result.

“I don’t believe U.S. exports will be affected unless economic malaise spreads from Japan to other countries,” said Greg Page, president and CEO of Cargill, to NGFA attendees. “If the world repudiates nuclear power, millions of tons of coal will compete for trains and ships,” and, ultimately, transport and the cost of carbon credits in Europe will rise exponentially.

But when it comes to immediate trade disruptions, both James Stitzlein, manager of market development and Kevin Adams, president and CEO of CGB Enterprises, the U.S. grain originator owned by Japanese grain company Zen-Noh and trading company Itochu, agree: We just don’t know.

“The closest analogy I can think of is when Katrina hit,” said Adams, who experienced the Gulf flooding firsthand as CGB is based in Covington, LA. “With businesses shut down, people without homes, communications cut off and even transportation nearly impossible, the only way to learn anything is face-to-face.”

Japan imports about 60 percent of its overall caloric needs, so it’s highly reliant on a steady supply of agricultural products from overseas. According to USDA’s Foreign Agricultural Service, the U.S. supplies one-third of Japan’s agricultural imports, shipping $2.929 billion of coarse grains, $1.981 billion of meat and meat products, $1.096 billion of soybeans and $795 million of wheat in the most recent marketing year.

“We do know that there is damage to ports, and in Japan, the feed mills are literally connected to the grain bins at the port. So we can conclude that milling will have to ramp up at plants that were not affected,” Adams said. “The island of Hokkaido is where the most livestock concentration is, but livestock also is relatively concentrated between Tokyo and Sendai. It may be a week or more before we know how the logistics will be handled in Japan.”

Rick Dusek, director of grain merchandising for CHS in Inver Grove Heights, MN, confirmed that the cooperative has ships headed for Japan but said that it is too early to expect damage reports on the country’s transport system.

“What we’re hearing from our customer base is that it is still unclear what’s happened. The ports and terminals south of Tokyo are in good shape and are resuming discharging grain. North of Tokyo, which is a less-populated area, they are still assessing damage,” Dusek said. “Without question, though, there will be some pipeline disruptions. They may have to push back a few vessels or maybe unload at a different port. Short-term it will disrupt the supply chain, but we don’t expect any major disruption that would affect supply-and-demand tables long-term.”

More than almost any other country in the world, Japan relies on food imports to keep its grocery store shelves stocked and domestic livestock fed. While importing more beef and pork in recent years, it still accounts for about 30 percent of the world corn trade.

“Japan imports 16 mmt of corn a year, it’s the world’s largest corn importer, so it’s very significant,” Dusek added. “It’s a very large part of CHS’s business and the No.-1 destination for our corn.”

Shipments of grain from the U.S. have not been slowed in the wake of the disaster, Adams said. “If anything, the concern is more how quickly they can get there.” Typically, shipments from the Gulf take a month to traverse the Panama Canal and arrive in Japan.

“Ultimately, we don’t think there will be a huge impact on Japanese demand for U.S. agricultural products, but we will know a good deal more in a week or 10 days,” he said.

DTN Executive Editor Marcia Zarley Taylor also contributed to this story.

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User

( function ( body ) { 'use strict'; body.className = body.className.replace( /\btribe-no-js\b/, 'tribe-js' ); } )( document.body );