TOKYO (Nikkei)--The governments of Japan and Canada will announce this month that they will begin negotiations aimed at concluding a free trade agreement, The Nikkei has learned. Prime Minister Naoto Kan and his Canadian counterpart, Stephen Harper, plan to sign a deal to start free trade talks when they meet on the sidelines of the G-8 summit to be held in May in France.
Tokyo and Ottawa will soon launch a working-level study group to lay the groundwork for full-fledged free trade talks. Trade between the two countries totalled about 1.8 trillion yen in 2010.
Canada is Japan's 18th-largest trading partner, while Japan is Canada's fifth largest. Japan hopes a trade pact will give it better access to Canada's rich supplies of energy and natural resources -- such as coal, copper and lumber -- in addition to boosting Japan's exports of cars and autoparts. But since nearly 40% of Japan's imports from Canada are agricultural and livestock products, such as pork, wheat and rapeseed, scrapping tariffs on farm products will be contentious.
Japan faces similar challenges as it discusses eliminating tariffs on agricultural imports from Australia. The two countries resumed bilateral trade talks on Feb. 7. If Japan and Australia can reach an agreement by the middle of the year, it may give a boost to the talks with Canada.
Source:The Nikkei Feb. 23,2011
TOKYO (Dow Jones)--Japan posted a rare trade deficit in January, as weaker-than-expected exports and a sharp increase in import costs pushed the numbers into the red for the first time in 22 months.
The government said that exports rose 1.4% from the same time last year. It was the 14th straight month of gains but the figures were much weaker than the 7.4% gain that economists had expected.
Ministry of Finance officials said that the low figure was due in part to smaller growth in exports to China, which rose 1.0%, following a 20.1% jump in December. Exports to all of Asia rose just 0.4%.
Ministry of Finance officials said that the falloff was due in part to the Chinese Lunar New Year holiday period when most businesses close.
Imports meanwhile jumped 12.4%, due in part to sharp increases in the costs of imported raw materials. The government said that the value of crude oil imports were up 10.6%, while crude oil-related materials jumped by 38.5%.
Economists said that Japan's economy faces the risk that higher import costs hitting a sluggish economy could herald a period of "stagflation." This occurs when higher external costs push up costs, but companies are largely unable to pass them through to consumers given a sluggish domestic economy.
Of particular concern is the recent sharp rise in crude oil costs. Oil prices have jumped to a 28-month high on the New York Mercantile Exchange at $98.48 a barrel on Tuesday.
In January on average, the yen-denominated crude oil price was up 6.8% from a year ago, according to the trade figures, while the dollar-denominated price jumped 17.9%.
"It's likely we will see stronger imports in months ahead because it often takes a month for market prices to be reflected in the trade data," said a Finance Ministry official briefing reporters after the figure. In addition to pushing up costs, the higher oil costs are expected to hit key export markets, such as the U.S., according to economists. "If crude oil prices continue to rise, U.S. retail consumption may be hurt as the rising share prices has been a driver behind that," said HSBC Securities Chief economist Seiji Shiraishi.
Source:The Nikkei Feb. 23,2011
TOKYO (Nikkei)--Small and midsize clothing companies are overhauling their overseas production to reduce their heavy reliance on China, as they try to deal with such risks as a possible revaluation of the yuan and rising labor costs.
Measures to diversify production out of China have up to now been led by bigger firms like Fast Retailing Co.; now smaller players are doing the same. Kojima Iryo Co., a Gifu-based clothing maker, spent 1.9 million dollars (160 million yen) to build a factory in Dhaka, Bangladesh. The 4,400-sq.-meter plant employs 500 people and can turn out 30,000 pieces a month, mainly women's suits.
Kojima Iryo, which is a contractor to major Japanese apparel firms, has four textile factories in China and used to fill all client orders there, including those from Japan and elsewhere. But the company decided to set up plants in other countries as China's advantage in labor costs erodes with rising wages. As a first step, it will shift about 15% of its production to Bangladesh.
Marukyu Co. , a children's clothing maker, has just brought a new factory on stream in Bangladesh.
The plant is the Tokushima Prefecture-based company's third overseas facility. It also has production in China and Thailand. Its China operations now account for about 70% of its output. The firm aims to spread production among the three countries, cutting China's share to 45% and shifting 30% of output to Bangladesh.
Hybrid Hanbai Co., meanwhile, is accelerating its production shift from China to India. The Fukuoka apparel firm is buying more inputs from Indian suppliers, and last September set up a quality control section to ensure the products meet its standards. It hopes to cut the share of its production in China to less than 10% of the total, compared with 40% two years ago.
Corona Marudai Co., an Osaka-based firm that makes liners for shirts, will set up a unit in Vietnam this spring and expand procurement from local manufacturers. Women's apparel firm Dream Co., also based in Osaka, has set up a new factory in Indonesia. Its main overseas plant is in China, but it is responding to surging labor costs in China by boosting output at the new facility in Indonesia and a factory in South Korea.
Source:The Nikkei Feb. 23,2011
TOKYO (Nikkei)--Although Japan is a less attractive market than it once was for foreign carmakers, makers of autoparts from South Korea and other countries are working to expand their business with Japanese carmakers.
South Korean companies are particularly keen to supply Japanese automakers with components and a government agency, the Korea Trade-Investment Promotion Agency (KOTRA), is helping them make inroads. Most South Korean parts makers are too small to set up offices in Japan. KOTRA supports such firms, putting them in touch with major automakers in Japan and helping them overcome the language barrier and other obstacles.
Last year, KOTRA held exhibitions of South Korean autoparts in various places around Japan.
It offered to put on a sort of trade show for Mitsubishi Motors Corp. (7211), saying it would make all the arrangements and shoulder the cost. In mid-December, representatives from 50 South Korean autoparts makers gathered in a building in Seoul. In all, 42 components for electric vehicles and 77 parts for gasoline-powered cars were laid out for the Japanese company to see.
The exhibition ended with Mitsubishi Motors doing a deal to buy headlights from Hyundai Mobis, a Hyundai Motor Co.-affiliated parts maker, for several Mitsubishi models.
Halo effect
One reason foreign parts makers are so eager to do business with Japanese automakers is their strong focus on quality. Shin Hwan-sup, the head of KOTRA's Japan office, said a parts maker can enhance its brand image by getting an order from a Japanese carmaker.
U.S. autoparts maker Johnson Controls Inc. is setting up a new headquarters in Yokohama to consolidate its operations in Japan. Jeffrey Edwards, the company's vice president, said the firm hopes to leverage its worldwide production network to expand business with Japanese automakers, which are moving more production overseas.
Valeo SA of France recently said it will buy shares in Japanese autoparts maker Niles Co. from RHJ International SA for 15.5 billion yen. The French firm hopes the deal will help it supply products to Nissan Motor Co. (7201), which used to be the largest shareholder in Niles, and to Renault SA, Nissan's French partner.
German autoparts maker Continental AG plans to hire about 100 engineers in Japan this year, almost the same number as last year. Its main clients are Western carmakers, but Continental predicts Japanese automakers will expand their market shares in North America and emerging markets.
President Elmar Degenhart said that his company's Japanese unit will be significant for Continental as long as Japanese carmakers have their main R&D operations in Japan.
Source:The Nikkei Feb. 28,2011
TOKYO (Nikkei)--Japan's Transport Ministry plans to support efforts by members of the Association of Southeast Asian Nations (ASEAN) to establish safety standards for automobiles.
The ministry will dispatch its own experts and officials from Japanese carmakers to the Philippines, Thailand, Malaysia, Indonesia and Vietnam to provide the newest information on international safety standards. It will also invite government transportation officials from those nations to Japan.
Japan seeks to encourage the creation of safety standards for such items as brake testing and car light positioning. It will also press the nations to develop legislation to verify that the standards are being met.
Some ASEAN members tend to have insufficient auto safety standards or lack verification procedures. Consequently, Japanese automakers have cited difficulties in producing vehicles owing to vague standards.
Source:The Nikkei Feb. 26,2011
TOKYO (Nikkei)--Moody's Investors Service Inc. on Thursday warned that it will consider downgrading its rating of Japanese sovereign debt if the government fails to live up to the promise of comprehensive tax reform.
A downgrade would be triggered by an inability by the government to put into place its comprehensive tax reform program, Moody's said in a report. The U.S. credit ratings agency on Tuesday lowered its outlook on its Aa2 rating of Japanese government bonds to negative from stable.
The report explained that even if Japan succeeded with implementing reform, its credit ratings will not face upward pressure due to the possibility of further debt increases. Frequent prime ministerial changes was another negative factor highlighted in the report.
Under Prime Minister Naoto Kan, the government is debating combined reform of the tax and social security systems, but Moody's cautioned about the future of the administration given the divided Diet and strife in the ruling Democratic Party of Japan. The report suggested that if the government and its policies stray, it would lead to a ratings cut.
Japan can issue debt with lower interest rates than the U.S. and European countries and its households have thick cushions of financial assets. But Moody's warned that Japan could suddenly lose its strong position. Public debt in excess of financial assets as well as a current account deficit were positioned as tipping points for an increase in long-term interest rates.
Source:The Nikkei Feb. 25,2011
TOKYO (Nikkei)--Daimaru Matsuzakaya Department Stores Co., Takashimaya Co. (8233) and other department stores are establishing retail areas catering to women around age 40.
Daimaru Matsuzakaya will gradually unwrap new retail spaces for that age group in six locations, starting with its Kyoto Daimaru site Friday. The spaces will offer pants, jackets, shoes and other apparel, with prices for pants mostly set at less than 20,000 yen. First-year sales are targeted at 1 billion yen. Takashimaya will bolster its lineup for women around age 40 at major stores starting in spring.
Clothes and bags from French brands maje and Sandro will be the draw, with sales to begin at Takashimaya's Shinjuku and Kyoto stores in late March. By fiscal 2013, both brands will be handled by roughly 10 of the company's sites. Sogo & Seibu Co. will increase stores stocking private-label clothing designed for women in their 30s and 40s. It aims to lift sales 20% on the year to 6 billion yen in fiscal 2011.
So-called junior baby boomers, born between 1971 and 1974, will begin hitting their 40s this year. Many such consumers frequented department stores in their 20s. By overhauling store layouts and lineups, department store operators hope to win them back.
Source:The Nikkei Feb. 24,2011
TOKYO (Nikkei)--Consumers are being hit with higher prices at the supermarket as brisk emerging-market demand and poor weather conditions push up food prices worldwide. Prices slid in the aftermath of the 2008 global financial crisis on weak consumer spending and intensifying competition among retailers. But as more domestic manufacturers pass on rising costs to consumers, price hikes are hitting home.
According to a Nikkei Inc. survey of 60 food and daily-use goods in January, average prices in 37 product categories, or over 60%, were higher compared to three months earlier. Only 14 categories recorded price declines, marking the first time that items with rising prices exceeded those that fell since the survey's launch in 2009.
Nine products were unchanged from October. In January, white sugar rose 11.5% from October, while cooking oil and mayonnaise prices increased 5.8% and 3.7% respectively. International raw sugar prices are at a roughly 30-year high owing to low rainfall levels in sugar-producing nations such as Brazil and soaring emerging-market demand.
Mitsui Sugar Co. ther domestic producers have gradually increased shipment prices since last autumn. Cooking oil prices have risen because of a roughly 40% jump in prices of soybeans, a key ingredient, compared to a year earlier. Long viewed as a loss leader by supermarkets, prices of cooking oil had inched lower through the end of last year. But manufacturers have begun raising their prices since last autumn.
"The price hikes are finally taking hold," says an official at J-Oil Mills Inc. On the other hand, prices of spaghetti and tissues fell 5.2% and 1% respectively from October. "Tissues are a product that help attract customers," says an employee at a Tokyo area supermarket, explaining the price fall.
The previous October survey recorded price increases in 20 items from three months earlier and declines in 31 goods. Nine items had prices that were flat. The latest price data was based on point-of-sale information collected by Nikkei Inc. from around 320 supermarkets nationwide.
Source:The Nikkei Feb. 22,2011
Leading pet-food makers such as Unicharm Corp. and Mars Japan Ltd. have responded to consumer demand for more age-appropriate pet products by pushing a new range of items specially designed for cats and dogs age 10 and older.
The new offerings should quell consumer concerns that most products in the senior pet segment are only designed for pets above the age of 7, without any options specifically catering to much older animals. But now, pet-food producers are increasingly coming up with food products that are in line with the diets suggested by veterinarians.
The aging of Japan's pets mirrors the demographic trends affecting the country's human population. Figures from the Japan Pet Food Association show that the number of young pets between the ages of 1 - 6 years fell from 50% to 46% of the total population of cats and dogs in Japan between 2009 and 2010. Meanwhile, the number of pets between the ages of 7 - 9, 10 - 12 and 13 or older expanded. Current projections also suggest that more pets will live longer lives.
Unicharm is set to introduce a product in March focused on kidney-related health for pets near the age of 15 years. The new offering is the company's latest addition to its popular Neko Genki and Gin no Spoon cat-food brands. Many older cats die of kidney failure, so the company has reduced phosphorus levels and added oligosaccharides, which reduce ammonia production, in its newest products. Phosphorus is said to negatively affect the kidneys when consumed in large amounts.
Kidney trouble increases significantly in cats over the age of 10. Few commercial pet foods have been formulated to specifically address this problem, so many cat owners have been feeding their pets according to diets prescribed by veterinarians.
Kidney care
Dry Neko Genki cat food is priced at 1,160 yen ($14) per 1.6kg bag, more than 700 yen higher than the average price of 457 yen average for dry cat food, according to a recent one-month point-of-sale survey by Nikkei Inc. The profit margins are far higher. "The market for older cats and dogs has expanded rapidly over the past few years. We distinguish our products with a clear concept - kidney care," said an official in the food department at Unicharm.
The company estimates that the pet-food market for animals over the age of 10 has grown from about 200 million yen in 2003 to about 20 billion yen in 2010.
In the fall of 2009, the firm began marketing food products for animals aged 13 years and older, with its Neko Genki line for cats and its Aiken Genki line for dogs. These product lines include many ingredients designed to strengthen the immune system, which tends to deteriorate with age. The products come in a range of packaging, including cans, pouches and cups. Sales are rising quickly, by 10% year on year.
Hill's-Colgate (Japan) Ltd. released its line of Senior Advanced dry food under its core Science Diet brand last September. The line was designed to be healthier for dogs 13 years and older and cats above the age of 14 years. Prior to the launch of these products, the company had only specifically catered to cats above the age of 10 and dogs over the age of 11.
Better flavor
Senior Advanced has roughly triple the amount of fish-derived Omega-3 fatty acids, compared to the firm's other products. The suggested retail price for a 1kg package is 1,712 yen for dogs - nearly 1,000 yen more than average dry food prices, but sales have been strong.
Mars Japan launched three new cat-food products for animals the age of 15 and older under its Kal Kan Whiskas brand last August and September. The dry foods offer better immune-system support and a higher ratio of antioxidants, with vitamins E and C. The pellets are also smaller and easier for senior cats to eat. The average price for a 2kg package is 610 yen.
"When cats surpass the age of 15, owners are more motivated to give them better food," said one
The food is also higher in calories, so older cats can get sufficient nutrition from smaller portions.
The firm says both the dry and wet products are beating sales expectations.
Source:The Nikkei Weekly Feb14,2011
New fusion spices are for those who not only like both but also like creating new flavors Wasabi, yuzu and other traditional Japanese seasonings are increasingly finding their way into Western spice racks and fusion recipes. The spices are popular among housewives because just a little goes a long way to completely transform a taste. They also are a great match for hot-pot and cold-tofu dishes.
"It looks like Tabasco." That was the impression of a shopper at Japanese Natural Store En, in Chiyoda Ward, Tokyo.
She was checking out Prikkheezu, a sauce known for its green pepper mascot and cute logos. Chikami Miltec Inc., a paper product wholesaler in the city of Kochi, manufactures and retails the condiment.
Flavor profiles
So what's a papermaker doing dabbling in hot sauce? Kunio Chikami, who heads Chikami Miltec, got hooked on the spike of hot pepper used in Thai cuisine while making frequent visits to a company affiliate in the Southeast Asian nation. That led him to a brainstorming session in which he hit upon the idea of a seasoning that combined Thai hot pepper and ponzu, a vinegar that packs a yuzu punch. Yuzu, a tart citrus fruit, is produced in Kochi.
After being featured on a TV show late last year, December shipments of Prikkheezu hit 1,500 bottles, a manifold increase from the same time a year earlier. After the New Year's holidays, sales rose further. In two to three days, the company received the same number of orders it got during the entire month of December - many more than it had anticipated. Prikkheezu had been sitting on En's shelves for more than a year. Lately, though, some customers have been grabbing six bottles at a time, and others are buying the stuff as a gift.
The sauce's sudden popularity has Chikami Miltec working to boost production capacity, but that could take several months. As things stand now, Prikkheezu production is barely catching up with orders. Wasa Buono!, a wasabi-based spice, is another of En's hot-sellers. At first glance, Wasa looks like Italian Genovese sauce, and is even used as a topping for pasta - as well as for roast beef and chicken - dishes.
A woman in her 40s and a regular Wasa buyer said she purchased her first jar of the sauce for a chicken recipe but instead used it as a spread, along with some mayonnaise, on a piece of bread.
After toasting, the concoction was delicious. "Wasa goes well with anything, so I'm giving it as a gift to a friend who likes to cook," the shopper said.
Consumer interest in spices has soared. Helped along by a boom in chili oil, interest has been primarily toward stronger and spicier tastes. Soy sauce, salt and ponzu have always been staple ingredients, but the consumers who are buying these new cross-cultural condiments are looking for a simple way to create new flavors.
Murakara Machikara Kan, also in Tokyo's Chiyoda Ward, sells local specialties from different parts of Japan. Late last year, it began selling five different types of liquid yuzu spice from the Kyushu region, borrowing from the popularity of Tabasco-style sauce. "In the past, demand was great for yuzu pepper (paste)," a Murakara worker said, "but lately we've been getting lots of inquiries for liquid-type yuzu pepper because it is convenient as a cooking or tabletop spice."
Green and juicy
A really hot item these days is Kabosco, created by a pickle store in Oita Prefecture. It won the grand prize in the Japan Vegetable Sommelier Association's spice competition of 2010. Entries are judged on five characteristics, including novelty, degree of impact on flavor and local color.
Kabosco was selected for its uniqueness, for retaining the taste of kabosu, a juicy green citrus fruit similar to yuzu, and for its ties to its birthplace.
Less than a year after its release, 20,000 bottles of Kabosco have been sold, over four times more than the initial sales projection. Another unique product that has hit the market in the last year or two is a syrup made from a combination of miso and chestnut paste that goes as well with sweets as it does with fish broiled in the Saikyo style.
Source:The Nikkeiweekly Feb.21,2011
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th