The government’s scheme to reignite inflation has not been very successful so far. Though consumer prices did rise a bit, the increase was based on things like high oil prices, the strong dollar and a boost in the consumption tax, and lately deflation seems to have kicked in again.
When oil prices were high, wheat and corn prices rose too, thus raising the price of related products. But even those products are now slightly cheaper than they were a year ago. It’s just that the media, in deference to Abenomics, isn’t really reporting it.
There is one food item that has shown a steady rise in price: bananas. According to the Japan Banana Importers Association (JBIA), the wholesale price of imported bananas has gone up by 30-40 percent since 2014, mainly due to the lower value of the yen. Add to that the 3 percent hike in the consumption tax and bananas, the most ubiquitous fruit in Japan, would seem to be much more expensive than they were five years ago. However, many people may not have noticed, since banana prices have always been lower than those of other fruits in Japan. And they still are.
As a matter of fact, when the JBIA surveyed consumers in 2014, 65 percent of respondents said they ate bananas regularly specifically because of the low price, which, at the time, was about ¥350 per kilogram wholesale (with one banana weighing about 150 grams). Relatively speaking, however, that’s pretty expensive, since the per-kilogram price between 1975 and about 2010 remained stable within the ¥180-250 range. In 2012 it was around ¥190. Obviously that makes for a fairly significant increase, but people still think of bananas as being cheap.
The reason is context. Whenever foreigners are surveyed about prices in Japan, fruit is always cited as being overpriced, but basically, they are comparing Japanese fruit prices to those in their home countries. Japanese people tend to think of fruit as a species of dessert, and they prefer very sweet fruit, which local growers provide, but at a premium. Citrus fruits are considered too sour by most Japanese — except for mandarin oranges (mikan), which are prized for their sweetness and are very easy to peel. The agriculture ministry says that per-capita consumption of fruit in Japan is about half that of the European Union.
In the 1960s, even bananas were thought of as a special treat. They were a delicacy at the time, grown sparingly in Okinawa and parts of Kyushu. Back then, you would buy one banana at a time. When trade was liberalized in the ’70s, bananas were one of the first agricultural products to be imported in large amounts, initially from Taiwan and Ecuador. Now bananas account for 60 percent of all fruit imports, and 90 percent of the bananas sold in Japan are grown in the Philippines.
According to the financial magazine Toyo Keizai, households of at least two people buy an average of 18 kg of bananas a year, well ahead of the No. 2 fruit, mandarins, at 13 kg a year. The main reason is that bananas have developed negorokan, or “the perception of being reasonably priced,” though this could change due to demographics. In 2014 the Japan Business Press reported that fruit consumption in general was dropping in Japan because young people didn’t eat fruit — or, at least, not in their raw form. There has been an increase in processed fruits sold as confections and beverages, which appeal to younger people more than they do to their elders, who still see fresh fruit as a treat. Japanese in their 70s consume on average 152 grams of fresh fruit a day; Japanese in their 30s, only 61 grams.
This specialized image of fruit also explains why Japanese growers can get away with charging so much for their wares. Though the notorious ¥100,000 melon is an extreme exception, it does represent a model that is fairly widespread. Fruit is often characterized in Japan as the most appropriate gift, and people tend to pay more for gifts.
At present, fruit growers are protected from much cheaper imports by high tariffs that will be removed if and when the Trans-Pacific Partnership (TPP) goes into effect. In preparation for that day, local growers are positioning their produce as luxury items for export to well-to-do Asians.
If bananas are an exception to this rule, too, it’s because they are overwhelmingly imported from the Philippines, which did not participate in TPP negotiations. The country already has an Economic Partnership Agreement with Japan. Starting in the 1960s, Japanese trading companies invested in Philippine banana plantations, and in the 1980s growers started moving plantations to higher elevations, since the resulting fruit tends to be sweeter and that’s what Japanese consumers want.
Though China and India produce the most bananas in the world, they don’t export many. The Philippines is the third-biggest banana exporter in the world, and the fastest-growing, and Japan no longer has a monopoly on what they ship. The Japanese market’s reliance on bananas from the Philippines caused some problems a few years back when soil bacteria spread by one of the typhoons that ripped through the Philippines affected banana trees and decreased production by 4 percent between 2010 and 2013, thus driving up prices in Japan. In 2012, however, China — a banana importer as well as a grower — informally embargoed bananas from the Philippines due to the two countries’ disagreement over control of the Spratly Islands, so there were more bananas to send to other countries, including Japan, thus explaining the sharp drop in prices in the latter months of 2012.
Nevertheless, the banana’s status in Japan seems guaranteed by economics and convenience, even among young people who, in the aforementioned agricultural ministry survey, said that one of the reasons they don’t eat fresh fruit is because it’s “messy.” Japanese people don’t think of an apple as a ready-to-eat snack the way Americans do. They have to peel and slice it first. Bananas, on the other hand, are perfectly packaged.
Yen for Living covers issues related to making, spending and saving money in Japan on the second and fourth Sundays of the month. For related online content, see blog.japantimes.co.jp/yen-for-living.
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