Why Has Japan’s Orange Market Declined?
John
Dyck and Susan
Pollack
Japan was once the largest foreign
market for U.S. oranges, but since the mid-1990s,
orange consumption and imports in Japan have fallen
by over 30 percent. The United States is still the
source of most of Japan’s oranges, but Japan
has fallen to third place among U.S. export destinations.
Although income and price changes
are often important determinants of consumption,
they do not explain Japan’s falling orange
consumption. Recent ERS research shows that orange
consumption in Japan is sensitive to price changes,
but Japan’s prices have not changed much since
the mid-1990s. In addition, orange consumption in
Japan is not sensitive to income changes. In any
case, household incomes have been flat in real terms.
Japan’s steadily changing
demographics over the past 15 years have affected
orange consumption. The population is aging, and
the number of births is so low that Japan’s
population is gradually declining. The Japanese
tend to eat more oranges as they age, which has
helped boost orange consumption. However, Japan’s
oldest generations (born before World War II) have
shown considerably greater preference for oranges
than cohorts born in more recent decades. Thus,
aging has cut two ways: most Japanese, regardless
of when they were born, eat more oranges as they
get older; however, the Japanese who were born earlier
in the 20th century eat a lot more oranges, and
consumption falls as this older generation dies
off.
But even changing population patterns
do not explain entirely the recent fall in orange
consumption. The net effect of population change
appears to have been neutral since the mid-1990s.
After population, price, and income changes are
taken into account, much of the negative trend in
orange consumption per person remains unexplained.
The same phenomenon also affects fresh fruit consumption
in general in Japan. Some observers have suggested
that factors related to eating convenience may be
important, but this idea has not yet been tested.
The decline in Japan’s orange
market could accelerate as the generational shift
in taste for oranges becomes more pronounced. This
presents a challenge to U.S. orange growers, who
have long valued the Japanese market. Since Japanese
consumers are likely to increase consumption if
prices decline, lower tariffs on imports and lower
marketing margins in Japan would be in the interest
of U.S. exports.
This
finding is drawn from . . . |
| The
Japanese Market for Oranges, by Hiroshi
Mori, John Dyck, Susan Pollack, and Kimiko
Ishibashi, FTS-330-31, USDA, Economic Research
Service, March 2008.
|
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