The Office of Commercial Affairs,
Royal Thai Embassy in Tokyo, Japan
Japanese rice is bolstering its competitiveness- the price gap between Japanese rice and import rice is shrinking
Due to price drop of rice, Japanese rice is bolstering its competitiveness. The price of newly harvest rice in this year was the lowest since 2006 and the price gap of import rice has shrunk. The food catering companies or Japanese inns have been used import rice, shift to use Japanese rice.
The annual import rice volume to Japan under the Simultaneous Buy and Sell system, SBS, was about 100,000 ton and it is mostly for catering service and food industry use. However as of the end of this Nov., the import rice volume under the SBS is just 3,152 ton, that is only 6% of the same period last year. And the most of it is glutinous rice and there is few contracts were made for standard rice.
This is because the price of Japanese rice declined and that of foreign rice has increased due to the demand increase all over the world. The average rice price of 2010, as of Oct.,is Yen 12,781/60kg, decreased by 15% from the same period last year.
Looking at the figure last year, the price gap between Japanese rice and import rice from the U.S. or China, shrank from Yen 4000 to Yen 2000 per 60kg. The price gap per 5kg is only Yen 170 and considering the sales price of import rice with 30 % of the surcharge, there is no difference between the sale price of Japanese rice and import rice.
The export in Japanese rice is also increasing.
The export volume of Jan.-Sep. in 2010 is 1,228 ton, increased by 60% from the same period last year. The volume by rate isn’t much, however, the total harvest volume is 8,480,000 ton this year. Japanese rice remain unsold in Japan but it sold out in Taiwan, a rice farmer in Niigata pref. said. Some famers started to focus on the export.
The market price of Japanese rice dropped sharply. The monthly average price of October, 2010 declined by 15% of the same month last year.
This year’s harvest was poorer than that of usual year but the supply exceeds the demand. This is mainly because the deterioration of the balance of supply and demand. The rice consumption dropped and according to MAFF, the annual rice demand volume from July 2009 was 8,140,000 ton, decreased by 700,000 ton compared with 10 years ago.
The rice of 2009 is over-stocked rice of 2009 is another factor to price down further.
Source:The Nikkei Dec. 20,2010
Purchase of newly harvested rice in order to price keep
The Japan stable rice supply promoting association consists of JA and other related group, decided to purchase 190,000 newly harvested rice harvested in 2010. It converts 32.1 billion, the Agricultural Fund, not yet determined how, to purchase rice in order to keep rice price which dropped sharply.
The association will apply to Ministry of Agriculture, Forestry and Fisheries for approve in January of 2011 and it plans to purchase by the end of March of 2011.
The price will be abound Yen 10,000/60kg. The association will collect the farmers who want to sell rice and the rice will be used for animal feed for farm animals. According to the prospect at the end of this Oct.,the 4% of harvested rice in 2010 is nearly equivalent to 340,000ton would be excess in supply. Under the individual income compensation system, when the rice price dropped, the government pays the subsidy but if the demand is improved, it can stop the rice price to drop.
The Agricultural Fund has been collected from about 70% of farmer all over Japan since FY 2004 under the pretext as the fund during plentiful crops. The Democratic Party administration compensate farm income from individual income compensation system so the Agricutulal Fund is in the air. JA-ZENCHU (Central Union of Agricultural Co-operatives) pleaded MAFF to approve the rerouting of the fund.
Source:The Nikkei Dec. 17,2010
Manufacturers Lighting Up On OEL Prospects
TOKYO (Nikkei)--A number of manufacturers, including Mitsubishi Heavy Industries Ltd., Panasonic Electric Works Co. and Konica Minolta Holdings Inc., are chasing OEL (organic electroluminescent) lighting, which is considered the next big thing behind LEDs.
OEL and LED lighting both consume less energy than incandescent and fluorescent bulbs and neither use harmful mercury. LEDs emit light straight from a single point, but OEL sheds a soft light from its surface. The technology also offers the advantages of being transparent and having bendable surfaces.
LEDs are being used for residential lighting, store spotlights, street security lights, signs and other applications. May of producers have entered the market, with mass production driving down prices remarkably.
For this reason, OEL is likely to first be used for design purposes to create a sophisticated feel in commercial facilities, upscale housing and elsewhere. Because their light-emitting surfaces make highly efficient, companies are counting on their expanded use in the ceilings, pillars and walls of office and commercial buildings.
Mitsubishi Heavy and other firms have formed Lumiotec Inc., which will be the first to begin mass production in January, initially turning out 60,000 units a year. Panasonic Works and NEC Corp. are eveloping their own offerings. And Konica Minolta has joined forces with General Electric Co., hile Mitsubishi Chemical Corp. has teamed up with Pioneer Corp. Sumitomo Chemical Co. and howa Denko KK are among others setting their sights on OEL.
With OEL offerings to be commercialized in 2011 and 2012, the domestic market will be worth 28.5 billion yen in 2015, estimates Fuji Keizai Co. Yet manufacturing costs remain an issue. Forming an even layer of organic materials on glass substrates is a difficult task. Even a 145mm x 145mm panel churned out by Lumiotec will likely cost around 30,000 yen.
Source:The Nikkei Dec. 14,2010
Industry's Enthusiasm Muted For Tax Plan
TOKYO (Nikkei)--While acknowledging the competitive boost from lower corporate taxes, the business community reacted tepidly to the fiscal 2011 tax reform proposal in light of new burdens faced by energy firms, chemical producers and other manufacturers.
An environmental tax, entailing additional levies on oil and coal, is expected to drive up the burden for the oil industry by around 150 billion yen a year based on annual fuel oil demand of some 200 million kiloliters.
"The oil industry is being fully exploited by tax authorities to fill its coffers," Akihiko Tenbo,
Backlash to the environment tax has also been strong from chemical producers, which also point out that curbing the scope of rules that allow firms to accelerate depreciation will be damaging to them.
"Companies like us will not be able to remain in Japan with a tax system that milks revenue from where it can while distributing funds sparingly," said Asahi Kasei Corp. President Taketsugu Fujiwara.
Machinery and other manufacturers are alarmed about an effective tax hike on capital spending.
Daikin Industries Ltd. holds little hope that lower taxes will spark an increase in domestic capital expenditures. And Elpida Memory Inc. President Yukio Sakamoto called for "the government to come up with policies for improving capital spending conditions by such efforts as bringing down infrastructure cost levels to put them more in line with other countries and by joining the Trans-Pacific Partnership agreement."
On housing-related taxes, the government will extend certain tax breaks and seek to establish a framework to promote housing services for the elderly. "We laud the government for responding to an aging society," commented Takeo Higuchi, chairman of the Japan Federation of Housing Organizations. But increased inheritance taxes and other higher levies on individuals raise concerns.
"High-income earners who will be hit with bigger tax bills will inevitably grow conservative in their spending," noted Sumitomo Forestry Co. President Akira Ichikawa. Among automakers, the government received praise for lowering corporate taxes. "This is the first step in creating a level playing field with other nations," a Toyota Motor Corp. official said. But rather than meet Japan Automobile Manufacturers Association requests to stick with R&D tax breaks, the government has shrunk the relief.
"It's a good blueprint because it considers smaller businesses," said Tadashi Okamura, Japan Chamber of Commerce and Industry chairman. He pointed out, however, that "the future direction of social security remains unsettled and holding over fundamental tax reforms to next fiscal year is a problem."
Source:The Nikkei Dec. 17,2010
Govt Strengthening Game Piracy Crackdown
TOKYO (Nikkei)--The government will add more legal muscle in its fight against the production and sale of devices that make it possible to play pirated video games on consoles sold in Japan, informed sources said Friday.
The Finance, Economy and Education ministries will jointly submit a bill revising relevant laws to next year's Diet session that will make producing and selling the devices a criminal offense.
Pirated games cost about 954 billion yen in the six years from 2004. Game consoles usually come equipped with software to prevent users from playing illegal copies. But a growing number of devices are being sold that neutralize that software.
The Ministry of Economy, Trade and Industry will revise the law designed to ensure fair competition, while the Education Ministry will beef up copyright law. The Finance Ministry will revise the customs law and add such devices to its contraband list.
Most of the devices sold in Japan are produced overseas, although government authorities have yet to find out where. Manufacturers of popular software for portable consoles lost a total of about 954 billion yen in the six years from 2004 due to pirated games, according to the Computer Entertainment Supplier's Association.
Source:The Nikkei Dec. 17,2010
Japan's Medical Visa To Allow Stays Of Up To 6 Months
TOKYO (Nikkei)--Japan will begin issuing next month a new type of visa that allows foreigners seeking medical services here to stay for up to six months, The Nikkei learned Thursday. Foreign Minister Seiji Maehara will announce the details as early as Friday. The government will designate 2011 as a provisional test period for the new visa, with changes to be made along the way if necessary.
In principle, the visa will cover all medical services ranging from comprehensive physical examinations to advanced medical treatments. To prevent patients from leaving without paying their bills or overstaying visas, they will have to secure a guarantor, such as a domestic travel agency or medical institution, before they can apply.
Foreigners who visit Japan for surgery or other medical services currently enter under a 90-day tourist visa. For long-term hospitalization and other conditions requiring a stay of more than 90 days, they are required to seek an extension. But depending on the medical condition, such requests have been denied.
The new medical visa, however, will allow patients to stay for up to six months. And once the visa is issued, the holder can repeatedly enter and exit the country within a three-year period. After filing, the visa will be issued in a minimum of five days. Eligibility criteria will include a certain financial sufficiency. But because medical expenses can vary depending on the services and treatments being sought, the government will not set specific income requirements. The government aims to issue 1,000 such visas next year.
By aiding the growth of medical tourism targeting well-heeled visitors from Asia and elsewhere, the government aims to encourage extended stays in hope of generating economic benefits.
Source:The Nikkei Dec. 17
Shoppers Find Room For Beauty, Taste Despite Slump
TOKYO (Nikkei)--Although department stores sales have slumped since the financial crisis struck in the fall of 2008, people are still relatively willing to splash out on pricey treats.
Based on data from the Japan Department Stores Association, The Nikkei compared department store sales of various products in September 2008 with those of the same month this year. The survey found that confectionery sales showed the smallest decline, falling 5.9%, compared to an average drop of 14.8%.
Among other relatively strong performers were cosmetics, whose sales fell 8.1%; perishable foods, down 8.3%; and processed foods down 9.3%. Amid the general consumer gloom, people are apparently still inclined to pamper themselves.
While the sales of many products saw declines in the 10-20% range, gift certificates bucked the trend, rising 9.1% over the two-year period. This was due in part to the eco-point incentives on the purchase of energy-efficient appliances. Because points could be exchanged for gift certificates used to purchase other items, that program, along with the government's other stimulus measures, gave department stores a small shot in the arm.
Source:The Nikkei Dec. 16,2010
Japan Firms Rely More On Emerging Markets
TOKYO (Nikkei)--Japan's listed companies earned a combined 2.63 trillion yen in operating profit in emerging economies in Asia and elsewhere during in 2009, roughly four times as much as a decade earlier, according to a Nikkei survey of 420 nonfinancial companies that close their books at the end of March.
The survey also shows that those profits comprised 36% of the total 7.34 trillion yen earned worldwide by the firms last fiscal year, up from 9% 10 years earlier. This underscores the firms' growing dependence on emerging economies and reflects a steady shift in Japan's industrial structure over the last decade.
As the world turns
The combined profit earned by the 420 firms last fiscal year was roughly unchanged from a decade earlier, indicating their slow recovery from the global financial crisis that struck in the fall of 2008.
But closer inspection shows a dramatic change in where they made their money.
Click to enlarge To calculate a firm's operating profit in Asia, the survey totalled profits made by output on and marketing units in the region. If products made in Japan were marketed by a sales unit in Asia, the profit resulting from their production accrued to the firm's Japanese operations, while the Asian unit was credited with earning the profit from their sale.
Some 74% of the firms' total combined profits came from domestic operations in fiscal 1999, with the Americas and Europe contributing 15% and 2%, respectively. In that year, only 9% of the firms' combined profits came from emerging markets.
Ten years later, emerging markets accounted for 36% of the firms' aggregate profit. The shares from Japan and the Americas fell sharply, to 52% and 10% of the global total. Europe's share was unchanged at 2%.
Profit center
By industry, carmakers and their parts suppliers' share of global profit from emerging economies by 54 times from 10 years earlier to 540 billion yen in fiscal 2009, sharply increasing the sector's dependence on these countries over the last decade.
Consumer electronics firms earned a combined profit of 760 billion yen last fiscal year in those markets, 160% more than 10 years earlier. Other sectors posted profit growth ranging from 100-400% over the same period.
Suzuki Motor Corp. posted a 7 billion yen profit at its Asian operations in the fiscal year ended March 2003, as it turned an Indian automaker into a subsidiary in 2002. By fiscal 2009, its profit from the region had risen eightfold to 56.1 billion yen.
"We have focused on bolstering our production capacity in Asia, but we will (now) shift the focus to upgrading our sales networks in the region," said the minicar specialist's chairman and president, Osamu Suzuki, vowing to solidify its market leadership in India.
Toyota Motor Corp. booked a 203.5 billion yen operating profit in Asia last fiscal year, up 120% from five years earlier, thanks to higher production in Thailand and Indonesia. Japanese firms' profit growth in Asia has continued in recent quarters. Sony Corp., for example, posted roughly 30% year-on-year growth in sales of electronic products and components in emerging economies in the July-September quarter.
NSK Ltd. , Japan's top bearings manufacturer, forecasts a 17% year-on-year rise in overseas sales to 348.8 billion yen this fiscal year. "Asia will likely account for 80% of that growth," said a senior managing director.
Japanese companies stepped up overseas production to cope with the yen's rapid rise following the Plaza Accord of 1985, which pushed the dollar down against yen and the West German mark.
Japanese consumer electronics and electronic parts makers led the way in shifting production to Asia and elsewhere in the 1990s. Carmakers followed suit, setting up plants as Asian economies took off around the turn of the century.
Now the focus is on how much Japan's manufacturers of industrial materials such as steel and chemicals, and nonmanufacturers such as construction and retail firms, will be able to boost their overseas sales and profits. They will likely pull out all the stops as domestic demand is expected to keep shrinking for the foreseeable future.
Source:The Nikkei Dec. 16,2010
Friday, Dec. 17, 2010
Cabinet OKs corporate tax cut, carbon levy
Overall burden on individuals will rise if Diet approves reform plan The government approved tax reform plans Thursday for fiscal 2011 that include a cut of 5 percentage points in the corporate tax and a hike worth about Yen 500 billion for individuals, especially high income earners.
The tax reform plans, proposed by the Tax Commission and adopted by Cabinet, include an environment tax on carbon emissions to fight global warming, as well as a cut in the aviation fuel tax.
The package is aimed at creating a more business-friendly environment through cutting the 40.69 percent corporate income tax, relatively high compared with international standards of around 25 to 30 percent. The government hopes the 5-point cut will strengthen companies' competitiveness overseas, attract foreign companies and create more jobs.
"We took bold action (by cutting the corporate tax), which will lead to more employment and more demand," Finance Minister Yoshihiko Noda, who heads the Tax Commission, told reporters.
The 5-point cut would amount to a roughly Yen 1.5 trillion reduction in the tax burden for companies, but the government has only been able to find less than Yen 700 billion to cover the revenue shortfall.
Noda admitted revenue sources are currently "insufficient" but added that the government will try to come up with more resources in the process of compiling the fiscal 2011 budget. Adjustments in revenue could also be made over the next few years, he said.
However, Noda stressed that the government will cap the new bond issuance in fiscal 2011 at Yen 44 trillion as earlier pledged, denying the possibility of issuing more bonds to cover the revenue shortfall.
On raising the consumption tax, which Prime Minister Naoto Kan had sought but abandoned after the ruling Democratic Party of Japan's huge setback in the July Upper House election, the reform plans only say the matter should be "urgently studied."
The plans call for a cut in the aviation fuel tax, which airlines have said is too high, from the current Yen 26,000 per kiloliter of fuel to Yen 18,000, which would be applied for three years starting with fiscal 2011.
Another major reform is the introduction of an environment tax in the form of price hikes for fossil fuels such as coal, natural gas and crude oil.
The tax would be raised gradually starting next October. As a result, the rate for a kiloliter of crude oil and petroleum products would rise from the current Yen 2,040 to eventually reach Yen 2,800 in April 2015.
The government estimates that revenue from the environment tax will be Yen 35 billion in the first year and Yen 240 billion a year when fully implemented.
While the package is somewhat business friendly, it will ask individuals, especially those with a high income, to bear a greater burden.
For instance, under current regulations the amount of deductions from taxable income for salaried workers expands as the amount of income increases. Under the proposed change, the deductions will be capped at a maximum of Yen 2.45 million for people who earn more than Yen 15 million a year. In addition, the deduction will be Yen 1.25 million for company executives with more than Yen 40 million in annual income.
These measures would boost government revenue by an estimated Yen 120 billion. The reform plans also abolish the exemption for adult dependents in households with annual income of more than Yen 6.89 million, which would add about Yen 110 billion to government coffers.
Gist of fiscal 2011 tax reform plans
The government will:
- Cut the effective rate of corporate income tax by 5 percentage points from the current 40.69
- Introduce an environment tax next October.
- Accelerate the study of comprehensive tax reforms, including whether to raise the consumption tax.
- Further lower the reduced corporate tax for smaller businesses to 15 from 18 percent.
- Limit deductions from taxable income for salaried workers with relatively high incomes and for
Source:Japan Times Dec.17,2010
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