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Abe's claim that Japan needs US corn due to pests looks shaky


THE argument by Japan's premier Shinzo Abe that the country needs to buy US 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 insect pest on some of the agricultural products," Mr Abe said during a joint press conference with US President Donald 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 tonnes of feed corn a year, a tiny amount compared with imports of about 11 million tonnes. That means that even if every single field was damaged by the moth larvae that Mr Abe was referring to, the country would still only need to import 1,000 tonnes to fill the gap.

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The US is already the top supplier of corn, holding a 92 per cent share of Japan's total imports last year. Despite this, Mr Trump indicated the purchases will be huge.

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 Trans-Pacific Partnership means it's buying more meat instead, he explained.

What's more, local media reports that Japan will buy more corn from the US would mean that the former will need to reduce purchases from America by the same amount next year or resell the corn to other countries, he added. BLOOMBERG