In January 2023, according to Japan Trade Statistics data, the exported volume of HS Code 03 products from Japan totaled 16 thousand mt, which represents a decline of 7.6 thousand mt or 31% year-over-year (YoY). This contrasts with January 2022 numbers, which were mostly unchanged compared to the previous year.
The bulk of the decline in volume can be attributed to lower exports of frozen whole mackerel which declined by 5.6 thousand mt. Other products such as frozen sardines also experienced a sharp drop in volume (-1.7 thousand mt). In addition, some of the products which provide the bulk of Japanese export value such as scallops and yellowtail fillets, also experienced a notable decline in volume.
According to Anna Mochizuki, Tridge representative in Japan, there were lower volumes of mackerel (in terms of tonnage) in the past season. The low catch of this product wasn’t enough to supply the domestic market. The season typically starts in September, however, according to local reports, the 2022-2023 catch was delayed until November. The bulk of Japan’s mackerel exports go to Thailand and Vietnam, and those destinations were the ones with the largest decline. Some of the decline in exported volume might be also explained by an increase in the average unitary value, which rose 8% year-over-year for all destinations, but was sharper in other particular major destinations, such as Thailand, where the average price rose 39% YoY.
Source: Tridge and Japan Trade Statistics
Overall mackerel production in Japan was reported to be over 400 thousand mt in 2021, which represented an increase compared to 2020 numbers, but has overall trended downward in recent years.
In terms of value, however, exports rose 2% YoY to JPY 13.3 billion, as higher prices (+48% YoY) managed to more-than-offset the decline in volume. This January, the average unitary value for all HS Code 03 products reached its highest level in at least three years, at JPY 831/kg, up by 48% YoY. Underlining the price increase is ongoing strong demand for Japanese seafood overseas and reportedly lower domestic catches in general (in terms of tonnage) during the past and current fishing season, although this varies by product. For example, other products such as frozen Pacific salmon did experience an increase in volume which added to higher prices and resulted in overall value rising more sharply. The products with the highest value among the HS Code 03 products, scallops and yellowtail fillets, also saw a sharp increase in unitary values, though not enough to offset the decline in exported volume.
Higher prices more-than-offsetting lower export volumes is a trend that continues from last year. Last year, Japan exported 559 thousand mt of HS Code 03 products, with a total value of JPY 257 billion. In volume terms, exports fell 5% year-over-year (YoY), but value rose 27% YoY, as the average unitary value rose by 33% YoY.
The largest exported product, in value, was frozen scallops (HS Code 03072210 and 03072290), with a total of JPY 81.1 billion, rising 51% compared to the previous year. The exported volume of this product also rose by 17% YoY. Along with exports of live, chilled, or fresh scallops, total scallop exports remained the largest food product exported out of Japan. Over half of the exports of this product go to China, where some of it is also further processed and exported. Other major destinations include Taiwan, the US, and the Netherlands.
Source: Tridge and Japan Trade Statistics
Among those products with the largest value, almost all experienced YoY growth, with the notable exception of frozen whole mackerel, which experienced a 29% plunge in exported volume, a trend which continued in early 2023.
What to expect in 2023?
Ongoing strong demand and lower production reported so far this year suggest prices will remain higher compared to their past 5-year average, within their seasonal scope, in the upcoming months. In addition, potential lower domestic production in some products in Japan’s main destinations, such as scallops in the US, will put further upward pressure on prices. In fact, US import value of Japanese frozen scallops during 2022 rose 77% in annual terms (at USD 140 million), with the volume rising 55% YoY (at 7.4 thousand mt) and the average import price by 14% YoY (at USD 19/kg). In January 2023, the US import price for Japanese scallops rose to its second-highest level in at least 5 years, at USD 22.42/kg. This suggests that exports of Japanese products will also remain strong, as prices, coupled with a weaker Japanese yen, will incentivize more domestic production to go overseas. Nonetheless, there’s room for downside as well, as an ongoing high price in Japanese products might hamper demand elsewhere, as consumers consider cheaper seafood alternatives or importers consider cheaper origins. This was the case with many products in 2022.