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Trade

Imported meat fills Japan's cold warehouses to the seams

Freight headed for Tokyo is often held at faraway facilities

Meat imports have increased 40% over the decade since 2009.   © Reuters

TOKYO -- Cold-storage facilities in the greater Tokyo area are operating beyond capacity as recent free trade agreements have led to a surge in meat imports.

Freezer and refrigerated warehouses in Tokyo logged an inventory ratio of 40.4% for January, or above the 38% deemed as the capacity threshold, according to the Japan Association of Refrigerated Warehouses. The ratio in the Yokohama area was worse at 44.9%.

Japan's meat imports topped 2.23 million tons last year, up roughly 40% from 2009. This follows the Trans-Pacific Partnership trade agreement going into force at the end of 2018, and Japan's economic partnership agreement with the European Union taking effect in February 2019.

The growth is also due in part to increased consumption, as well as shipments pushed forward in response to African swine fever.

On the other hand, nationwide cold-storage capacity totaled around 40 million cu. meters at the end of this past December -- up just 10% or so from 2015.

"The cost of storage is rising, which will likely impact earnings," said a representative at a frozen-food affiliate of Maruha Nichiro.

With the COVID-19 outbreak, "logistics between China and Japan has slowed, so the storage crunch is not as intense as it was at one point, but that does not mean the problem is resolved," said an official at the Japan Association of Refrigerated Warehouses. Certain corporations considered halting meat imports in December, the source said.

Meat warehouses are normally built near ports serving major markets, such as Tokyo and Osaka. But there is almost no space left in those areas to expand infrastructure.

Frozen-food producer Nichirei spent about 10 billion yen ($94 million) to build a massive warehouse in Nagoya in central Japan that will begin operations next month.

"There are merchants that ask us to store freight headed for Tokyo in Nagoya," a Nichirei manager said.

Domestic competitor Yokohama Reito, or Yokorei, opened its own storage complex this February in Ibaraki Prefecture, north of Tokyo. The company invested an estimated 6 billion yen to capture demand for cargo headed for Tokyo.

"It is becoming not so unusual to have Tokyo-bound freight be held" as far away as Hokkaido, said Masami Yasuda, a Yokorei executive in charge of the cold-storage operation.

The market for refrigerated logistics will exceed 2 trillion yen in fiscal 2021, according to the Yano Research Institute -- up 18% from fiscal 2018.

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