A Complete Look at The Japanese Market for Exporters: Trade Volumes, Top Commodities and Statistics

Japan and Australia have a strong economic relationship, with our northern neighbour playing a key role in our strategic and economic future. They’re our second-largest trading partner, with Australia exporting approximately AUD$59.1 billion in the 2018-19 financial year to Japan. Australia signed the Japan–Australia Economic Partnership Agreement (JAEPA) in 2015, granting Australian businesses a greater amount of access to Japanese markets – especially Japan’s agricultural market. If you’re looking to export goods to Japan, you’ve come to the right place. Below, we’ll look at the Japanese Export Market and what opportunities Japan has to offer Australian exporters (with data on the trade of different goods and commodities), the documentation you’ll need for export, as well as some important information about the Japanese free trade agreement.

Before reading on, we recommend taking a look at our ultimate guide to exporting from Australia to Japan.

Opportunities in the Japanese Market for Australian exporters

Japan is largely an import nation, importing around 61 per cent of the goods that are consumed. The country relies on Australian businesses for a wide range of goods, commodities and services. This has especially been the case since the signing of the JAEPA in 2015.

Below, we’ll look at some of the top commodities Japan imports from Australia.

Coal, iron ore and natural gas

Japan has consistently been one of Australia’s biggest customers for coal, iron ore and liquified natural gas (LNG). The year 2011 saw demand for Australian LNG spike significantly, after a disastrous earthquake, tsunami and nuclear disaster led Japan to adopt alternative sources of energy apart from nuclear power.

Two years later, in 2013, Japan was the destination for over 92 per cent of Australian LNG exports by value and over 80 per cent by volume. Australia was Japan’s largest seller for LNG in 2014 and, in 2018-19, Australia exported nearly $19 billion worth of coal, $20 billion worth of natural gas and $5.7 billion worth of iron ore and concentrates to its northern Asian neighbour.

Although Japan has restarted some of its nuclear reactors and is moving towards a target of net zero emissions by 2050, the country remains the biggest buyer of Australia’s coal and gas exports and is one of the world’s largest LNG buyers (if not, the largest). Both sides of Parliament in Australia have also expressed support for our continuing coal export trade.

Beef

Japan has also been a consistent customer of Australian beef and is arguably our country’s largest beef importer (rivalling China). In 2018-19, we exported $2.3 billion worth of beef to Japan.

The JAEPA was a huge success for the Australian beef industry, with enormous and immediate reductions in tariffs for both fresh and frozen beef.  The year 2017 saw a significant 22.8 per cent advantage in beef import tariffs into Japan for Australia. More recently, despite the COVID-19 pandemic, Australian exports in beef have experienced a sharp increase as restaurants in Japan return to around 75 per cent capacity.

Australia is well-known for its high quality, delicious beef and has an excellent reputation in Japan. From November 2019 to November 2020, Australia’s manufacturing beef exports to Japan increased by 4 per cent, making Australia a “dominant” supplier of Japanese casual dining restaurants and hamburger chains.

Aluminium

Japan is the largest importer of aluminium in Asia and, for a number of years, has also been Australia’s largest export market for metal. Japan relies heavily on aluminium, especially for its production of automobiles (one of the country’s largest exports).

In 2018-19, we exported approximately $1.3 billion worth of aluminium to Japan. Overall, aluminium accounts for about 1.5% of Australian exports, increasing by a massive 120% in 2018.

Most recent statistics show a growing demand for aluminium in Japan, indicating a recovery from the COVID-19 pandemic, as Japanese aluminium buyers were reported to buy 11 per cent higher premiums in the fourth quarter of 2020 ($88 per tonne for October-December 2020).

Fish

Japan is universally known as a nation of fish-lovers, with well-known foods such as sashimi and sushi establishing worldwide popularity. Australia exports a whole range of seafood, such as prawns, southern bluefin tuna, Tassie salmon, pacific oysters and the curious Patagonian tooth fish.

In Japan, opportunities exist to export salmon, the short-finned eel, spanner crab, shark meat, sea urchin and scallops. There is also a key market for southern bluefin tuna in Japan, although cool weather conditions have sparked concerns over whether tuna will be available for the catch.

Our value of fisheries and aquaculture exports totalled $1.58 billion in 2017-18. Whilst COVID-19 will likely have considerable short-term impacts on these figures, trade is expected to rise by 2.4% to $3.41 billion between 2020-21 and 2024-25.

Dairy

Japan is a lover of dairy, with recently changing diets presenting significant opportunities for Australian businesses. In 2016, cheese alone accounted for 89 per cent of Australian dairy exports to Japan. Aussie-based dairy supplier Fonterra forecast that its cheese production would double by 2020 due to strong Asian demand, especially because of pizza. Australian cheese continues to be a popular choice for Japanese importers.

COVID-19 has changed the trends of trade in recent months. Japan’s agricultural ministry announced that it would lower its imports of non-fat dry milk from the United States, but maintain its import of butter. Whilst this was due to the closure of restaurants and schools, dairy may still present opportunities for Japan as its eateries open again.

Key points when exporting to Japan

If you are engaging in exports to Japan it is important to note the below key points to ensure your shipment runs smoothly.

Getting the documentation correct

Unfortunately, when engaging in international shipping (no matter the country of export), one of the most important things is paperwork. It is no different with Japan. Having your documentation in order will ensure the shipping process is smooth, minimising any delay and unforeseen costs.

The most important documentation you’ll need includes:

• Commercial invoice – outlining the price and amount of goods you’re exporting;
• Packing List – containing information about the packing of the goods, including the weight and dimensions;
• Packing Declaration – a declaration you’ll need if you’re shipping via ocean freight; and
• Certificate of Origin – declares the country in which your goods were manufactured. If you’re importing, you can use the JAEPA Certificate of Origin (or any valid Certificate of Origin under the JAEPA) to access reduced tariff and duty rates on certain goods.

For more information, see our article on the five shipping documents you’ll need for export.

Choose your shipping method: air freight versus sea freight

When exporting your goods to Japan, you may need to decide if air freight or sea freight is more cost-effective for your business. While air freight may be faster, it tends to be more expensive and inappropriate for urgent shipments. On the other hand, ocean freight is cheaper but large container vessels can experience unexpected delays.

You can read more in our article about the advantages and disadvantages between air freight and sea freight.

Sea freight times from Australian ports to the major Japanese ports (Tokyo, Nagoya and Kobe, Yokohama and Osaka) will differ, but a shipment can take:

• as little as 18 days from Sydney; and
• as little as 22 days from Fremantle.
• Air freight, on the other hand, can take less than 24 hours!

Shipping lines to Japan

Check Big Schedules for updated routes from Australia to Japan in real-time.

The shipping lines you can engage to transport your goods to Japan may include:

• K-Line, who operate services from multiple cities in Australia lasting between 11-19 days;
• Cosco Shipping, who operate services from Melbourne, Sydney and Brisbane to Japan lasting between 12-29 days; and
• Pacific Asia Express, who operate an Oceania schedule between Australia and Japan.

You can read more on our Japanese exports page – we can ship your goods across the ocean in just 18 days (and overnight by air for urgent deliveries).

Work with ICE and Hankyu Hanshin – Your expert freight forwarders

We here at ICE Cargo are proud partners of Hankyu Hanshin Express, a world-leading Japanese-based international logistics company.

If you’re looking to export your goods to Japan, working with our expert freight forwarders at International Cargo Express means you’ll be working with one of the most prominent Japanese experts. Hankyu Hanshin Express are specialists in the Japanese market and are able to provide unparalleled advice when it comes to doing business in Japan.

Hankyu Hanshin Express offer the very best logistics services between Japan and Australia. We have a dedicated in-house account manager that can take care of your shipments on the ground in Japan, ensuring your shipments flow smoothly.

A Japanese -Australia Free Trade Agreement?

As mentioned above, there is a current free trade agreement in place with Japan, the JAEPA.

When Australia and Japan signed this landmark agreement, Australian businesses were granted significant preferential access into Japan’s marketplace. Because of the Agreement, around 98 per cent of Australia’s merchandise exports to our northern neighbours receive preferential access or enter duty-free.

The Agreement rapidly reduced tariffs on beef, wine, dairy and seafood, whilst virtually all of our exports of resources, energy and manufacturing products now enter Japan duty-free.

Questions about Japan?

Do you still have questions about exporting goods from Japan and how to take advantage of the JAEPA? Please feel free to give us a call today to chat with our expert freight forwarders.

Our highly trained and experienced personnel have connections in Japan. We can make sure your freight arrangements are well-suited to your transaction between Oceania and Japan and would love to work with you.

Request A Quote

or call us on 1300 227 461