Reports tracking the ongoing tragedy in Japan have warned of crops with high levels of radiation, empty supermarket shelves and two-hour-long waits for food services – conditions bordering on a food crisis.
These on-the-ground accounts of the aftermath of last month's massive earthquake and tsunami could lead to speculation that the country is hurrying to import agricultural commodities. But in reality, Japan’s trade activity is in a holding pattern. According to the Port of Vancouver and United Grain – both of whom export products to Japan – the stark situation has not initiated any immediate increase in trade.
Alastair Smith, senior director of marketing and operations at the Port of Vancouver, said that wheat is the largest export by volume going to Japan from the port. As Asia’s second-largest wheat buyer, Japan uses the grain as a source of livestock feed and mills it for retail items such as bread and cookies. Still, it is unclear what Japan will need from America’s wheat producers after their recent disaster.
“We have asked our partners at United Grain, and they’ve indicated to us that [demand] is going to be neutral with the possibility of a slight downward trend,” Smith said. “All we can say is that it’s a tremendous disaster, and that we’re certainly concerned about the people in Japan.”
Smith said that information changes almost daily in international trade, but after a disaster of this magnitude a nation tends to focus on pressing emergency work. To add to the matter, reports from Japan’s hard-hit Northeast region indicate that the earthquake and tsunami damaged seaport and shipping infrastructure, power supplies and feed mills that store grains and process feed.
These feed mills are of particular importance to United Grain, which expanded operations at the Port of Vancouver early this year. Last year, the company shipped 3.5 million tons of wheat from the Port of Vancouver, and Japanese buyers accounted for 38 percent of that total, according to Smith.
Many questions still surround Japan’s needs, but there’s no doubt among some analysts that their needs will increase amidst rebuilding and recovery efforts. Tom Neher, vice president of agribusiness with AgStar Financial Services, said that once ports and infrastructure are rebuilt, the U.S. should see an increase in demand for both food and rebuilding products.
"Once they do get all of those channels open, there's going to be a lot of pent up demand within that country to refill those channels and begin rebuilding," Neher said. "Once they get it open, things could move pretty quickly."
