Business

Abe's claim that Japan needs U.S. corn because of pest damage looks shaky

Bloomberg

The argument by Prime Minister Shinzo Abe that the country needs to buy U.S. corn because pests are eating up its domestic production is looking rather dubious.

“With regard to the potential purchase of American corn, in Japan we are now experiencing pests on some agricultural products,” Abe said during a joint news conference with Trump last week, after striking a deal to buy more American agricultural products in return for delaying additional tariffs on Japanese auto exports.

But Japan produces just 1,000 tons of feed corn a year, a tiny amount compared with imports of about 11 million tons. That means that even if every single field was damaged by the moth larvae that Abe was referring to, the country would still only need to import 1,000 tons to fill the gap. The U.S. is already the top supplier of corn, holding a 92 percent share of Japan’s total imports last year.

Despite this, Trump indicated the purchases will be huge. Because China didn’t buy what it said it would as part of the trade war negotiations, there’s now an excess of U.S. corn, and Japan will be “buying all of that corn,” he said.

The damage from the pests on domestic production is limited, said Akihiko Hirasawa, senior chief economist at Norinchukin Research Institute in Tokyo. Also, Japan doesn’t need to increase its corn imports that are used for animal feed either, as the free-trade agreement under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership means it’s buying more meat instead, he said.

What’s more, local media reports that Japan will buy more corn from the U.S. — equivalent to three months of its requirement — would mean it needs to reduce purchases from America by the same amount next year or resell the corn to other countries, he said. Kyodo News reported that Japan will buy an additional 2.5 million tons of U.S. corn.

“There are no reasons for Japan to boost corn imports,” Hirasawa said.

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