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Japan's Dairy Import Prices Soar Amid Output Cuts

20 February 2017

JAPAN - Cheese and butter import prices are climbing as exporting nations in Oceania and Europe curtail production of raw milk, while the yen's weakness against the dollar could eventually have a ripple effect on domestic retail prices.

Australian and New Zealand cheddar cheese prices covering the first half of 2017 soared to around $4,200 a ton, up 20 per cent from the second half of 2016, in recent negotiations between Japanese trading houses and major overseas dairies. Gouda prices climbed nearly 30 per cent, also to $4,200 a ton, the first time in three years that prices have risen for both.

Imports account for nearly 90 per cent of the cheese that is consumed directly, and for more than 70 per cent of the raw material for processed cheese. Major dairies such as Megmilk Snow Brand and Meiji Holdings use it primarily as an ingredient in processed cheese.

Producers have generally not moved to pass along the higher costs, as a Megmilk official says only that they are "considering how to respond." But continued increases in import prices likely will have an effect on consumers.

Butter import prices, which are managed by the government, also have risen since the end of 2016. Simultaneous buy and sell, or SBS, bidding conducted Thursday by independent administrative agency Agriculture & Livestock Industries yielded an average import price of 787,702 yen ($6,980) per ton, more than 50 per cent higher than a year earlier.

Source: Nikkei Asian Review

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