Marketing Rice in Japan
Introduction Rice is a staple food for about fifty percent of the world and is grown on about 146 million hectacres across the globe (Matsuba). ... Consumption of rice has doubled the past decade. ... The world’s annual production is now 535 million tons of rice, most of which is produced by Asian farmers. Interestingly however, only 5 percent of the world’s rice production is traded anually. As seen in the chart below Thailand is the top exporter of rice, exporting about 7. ... (Hays) Country Volume Thailand 7,500,000 MT India 4,500,000 MT United States 2,950,000 MT Vietnam 2,800,000 MT (tie) Burma 1,500,000 MT (tie) China 1,500,000 MT Considering that the world market for rice is thin and volatile, most countries cannot depend on imports to meet the food needs of their people. Self sufficiency in rice production is an important political objective in most rice dependant countries. ... For example, if China wanted to meet just 10 percent of its domestic consumption through imports, the demand for rice in the world market would increase by more than 80 percent. ... In addition, few developing countries have adequate foreign exchange for major international purchases of rice. (Matsuba) For my market analysis however, I have researched rice in a market that is quite different than other Asian markets. Japan, in order to make sure they are self sufficient in their rice production, have imposed high tariffs on rice imports to protect its farmers so as to make home-grown rice competitive with imports. The government has long held the belief that rice farmers need protection to ensure Japan’s food security which has caused conflicts while trying to maintain sound ties with its trade partners. Political and Economic Environment Japan is the world’s second largest economy with an immense potential for foreign direct investment. Few formal restrictions are imposed by Japan on FDI, and there are no export-balancing requirements or other trade related FDI measures on firms seeking to invest in Japan. However, despite Japan’s low level of restrictions on FDI, its FDI levels have remained small relative to the size of the economy. ... In 1999, Japan’s annual inward FDI totaled $21 billion, which was only 5 percent of its GDP. ... Japan reportedly invested over $66 billion overseas, while obtaining only about one third of that amount in inward direct investment (Countrywatch).