Educación continua

trade

Japan is the largest Asian market for organic products and especially for coffee, although Taiwan, Hong Kong, Thailand, Singapore, and Korea are also beginning to show an interest with modest imports. However the Japanese market is complex and not easily understood.

135 135 135 135 135 Various estimates have put the overall Japanese

growth-rate for organics at about 20 percent, but these appear to be based on general estimates rather than data analysis, since these data simply do not exist. Senior Ministry of Agriculture (MAFF) officials, however, state that the government is capturing data on the organic market from October 2002.46 _{There is potential} for confusion in this market since the Japanese term for organic products, “yuki”, also includes conventional products that, although produced in a more environmentally friendly manner, are not certified organic. In the mid - nineties one estimate from Twyford - Jones (1998) put the total market value for yuki products in Japan at about US$500 million. The International Trade Commission (2001) now notes that market to have grown considerably to an estimated US$2.5 billion for 2000. However, the market for certified organic yuki is estimated to be about 10 percent of the total yuki (Masuda, 2000). Introduction of the organic Japanese Agricultural Standard (JAS)47 _{for coffee in 2001 made the} market very uncertain and appears to have reduced the quantities of organic coffee that enter the country. It is very likely, according to several expert observers, that certified organic coffees have for some time been very considerably supplemented by uncertified supplies. According to one unofficial estimate from a top coffee trade association, approximately 4000 to 5000 tons of organic coffee were imported in 2001. Those certified as organic were estimated to be approximately 1320 tons. With the new standard in place and positive responses from certifiers and suppliers, it remains to be seen whether the market converts its current use to certified organics. Preliminary reports indicate that the certified volume has increased very

considerably for 2002 to about 4500 tons with more than 4000 tons of organic certified coming from Latin America alone. This makes Japan’s the second-largest market for organic coffees after the U.S.

A number of Japan’s leading coffee trading and roasting companies currently purchase Rainforest Alliance-certified coffee and promote the concept in Japan. These include: Itochu, Kanematsu, Ajinomoto General Foods, Volcafe Japan, UCC Ueshima, Kohikan Roasters and the Sumitomo Corporation. Volume figures are difficult to confirm but are estimated to be less than 100 metric tons in 2002.

Eco-friendly coffee is not regulated by the new government standard since of course its claims are distinct from those made for organic products. This may or may not limit its growth and that will in part be determined by whether there will be ready availability of certified organic coffee at competitive prices. Eco-friendly coffee is often priced below organic.

Fair trade is also projected to grow steadily but from a much smaller base. The fair trade movement dates back to 1989 with the founding of Alter Trade Japan Inc. By 1991 both organic and Fair trade coffees made headway in the Japanese market and in 1993 Transfair Japan was established. In 2001 they reported fair trade sales of 7.7 tons, a nearly 17 percent increase but still a very small quantity. 2002 figures show 9.5 tons and a more recent estimate for 2003 is 50 tons and accounts for the entry of new Transfair participants such as Starbucks Coffee Japan, Wataru, and Ogawa. Most of the country’s fair trade sales are outside of the FLO system. We estimate the volume to be in excess of 300 tons,

46 _{Early investigations unfortunately indicate that the organic beverages category is divided only into tea and other}

beverages. Unless this changes, it is impossible to extract the coffee portion from juices, soy milk, etc.

47 _{The Japanese Agricultural Standard is similar to the EC regulation on organics or the new U.S. regulation and}

represents a change from privately managed organic standards and sales to government regulation of these stan- dards and their representation in the marketplace.

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with one firm alone responsible for at least 170 tons in 2001. This is slated to increase considerably according to long-term contractual obligations whereby 2002 estimates easily top 400 tons and projections for 2003 are in excess of 600 tons. The volumes of the major sustainable coffee types are summarized below (figure 13.3).

Certification

Standards and certification systems will likely become clearer as market participants familiarize themselves with the new Japanese Agricultural Standard. Nearly all of the respondents - 95 percent - felt that the system was unclear and confusing. By October 2002 nearly 700 firms were officially registered under the JAS. The confusion about the distinctions between the different certifications and what they represent is believed to widely apply to consumers as well. Currently there are only two parties registered to the FLO system (Transfair Japan): the Wakachiai

project and Dai-ichi Coffee Corporation. The rest constitutes the vast majority of sustainable coffee businesses and typically operates without third- party verification.

Premiums

Japanese traders appear content to pay premiums of 20 percent or more for average to good quality organics and several respondents said they regularly pay a good deal more if quality is exceptional. Approximately 75 percent of respondents believed that organic premiums would probably diminish in the next two years while 15 percent believed they would stay the same.

For fair trade many participants are uncomfortable with the present price structure to farmers and therefore continue to operate outside of the internationally recognized FLO register for fair trade coffees.

Retail prices

There is a considerable range of retail prices from US$5.98 per kilo for discount coffee, to $15 for average supermarket-quality, $28 for Starbucks House Blend, and up to $38 for better coffees in specialty shops.48 _{The All Japan Coffee} Association annual survey49 _{shows that retail} prices have slipped with the average consumer paying approximately $12.50 per kg. Several

48 _{This does not include the estate or superpremium coffees and like Jamaica Blue Mountain that fetch considerably}

higher prices but are are relatively minor part of the market.

49 _{"Basic survey about the demand trend of coffee”. The sample is 6000 persons.}

137 137 137 137 137 companies mentioned that sustainable coffees

would be more viable if they were positioned at prices near to the average supermarket-quality and below Starbucks.

Significant supplying countries

for sustainable coffees

There are a number of supplying countries that have shipped uncertified coffees to Japan, but with the recent JAS-law the organic market underwent a significant shift. To date Colombia, Brazil, and Guatemala are its largest organic suppliers, Peru, Uganda, Bolivia, Mexico, Papua New Guinea, Ethiopia, Nicaragua, the Dominican Republic and El Salvador have all supplied this market.

Many of the same countries, plus Ecuador, also supply fair trade coffees.

Eco-friendly (shade-grown) coffees are imported from several countries, particularly Uganda, Ethiopia, Papua New Guinea, Peru, and El Salvador. Only the Salvadoran coffees were third party certified until recently. Now, certified eco- friendly coffees (Rainforest Alliance or SMBC) are available from El Salvador, Mexico, Nicaragua, Guatemala, Costa Rica, and Panama.