Following more than two decades of flat or declining prices, the Japanese economy has experienced sustained price rises over the past year and a half due to global geopolitical factors as well as a significant weakening of the Japanese yen against the US dollar. Food prices have risen at rates of over 8 percent year-on-year since March 2023 with certain products rising at double-digit levels. This report provides an overview of the economic landscape in Japan with specific analysis on the top U.S. agricultural export items to Japan.
Most of Japan’s fruits and vegetables are supplied domestically and as a result are largely insulated from international commodity prices and exchange fluctuations. This is especially true for vegetables, for which Japan has a 95 percent self-sufficiency rate, compared to fruits which stand at 60 percent. Nevertheless, there have been some price impacts in the vegetable market due to other factors.
Record-breaking heatwaves in the summer of 2023 damaged summer vegetable production and delayed the planting of autumn and winter vegetables, leading to short supply and higher prices. To bolster a weak domestic supply, importers may seek additional spot-based procurements for autumn and winter vegetables such as onions, celery, and broccoli.
The fruit market, on the other hand, has been experiencing long-term inflation over the past decade. Between 2012 and 2022, the average distributor price for domestic fruits jumped from 433 yen ($3.33) to 487 yen ($3.74) per kilogram, an increase of 12 percent (see Figure 10). This is primarily due to the shrinking fruit farmer population, which has halved in the past 20 years, causing overall production to drop. At the same time, remaining farmers are shifting to higher value “premium” varieties, further driving up prices.
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Source: apps.fas.usda.gov