Japan grain industry assesses impact
March 15, 2011
by Josh Sosland
SAN DIEGO — While imports of grain into Japan appear to have been curtailed by infrastructure disruptions in the wake of the natural and nuclear power disasters there, the full impact on the country’s grain industry is still difficult to assess.
“It’s too early to tell how this will unfold,” said Thomas Hammond, president of Columbia Grain Co., Portland, Ore. Columbia Grain is a subsidiary of Tokyo-based Marubeni Corp. Mr. Hammond spoke to Milling & Baking News while he was attending the National Grain and Feed Association annual meeting in San Diego.
Japan is a major outlet for grain shipped by Columbia, and Mr. Hammond said the company ships to ports throughout the country.
“The port where major damage was sustained in the northeast is a relatively minor port, but it’s still important,” he said. “The largest ports are Tokyo and south.”
Early indications suggest that several feed mills in the region may have been damaged but only one flour mill, Mr. Hammond said. The damaged flour mill, which has suspended operations, is owned by Showa Sangyo Co. Ltd., the third largest milling company in Japan, he said. It is located in the port city of Kashima, just north of Tokyo.
As is the case for all industry in Japan at the moment, a significant limiting factor for the grain and milling industries is the intermittent power outages that have followed the shutdown of damaged nuclear facilities, including the Fukushima plant that has been facing a crisis since shortly after the March 11 earthquake. The power outages were affecting large portions of the country, including parts of Tokyo, about 70 miles from where the earthquake struck.
Mr. Hammond expressed the view that transportation from import elevators to flour mills and from flour mills to bakers has not been a severe problem.
“Many mills are located at port locations and are sometimes connected to port silos directly by conveyors,” he said. “I believe other grain movement and flour shipments are handled mostly by truck. It’s a country where rail is mostly for people.”
Imports of wheat into Japan are done through government purchases based on quotas for individual companies. Mr. Hammond said it was unlikely the nation’s consumption patterns would change because of the earthquake.
“If anything, it could cause the Japanese government to be more conservative in maintaining inventories of food and feed grains,” he said. ”They take food security very seriously.”
Mr. Hammond said communication between Columbia Grain and Marubeni has been limited since the natural disaster. He expressed a sentiment voiced by other North American executives of Japanese companies in recent days — a desire not to “get in the way” as his counterparts struggle with the difficulties resulting from the disaster.
He said Marubeni employees have been accounted for and are safe. Because public transportation was down after the earthquake, many employees slept at Marubeni headquarters in a 20-sotry building in Tokyo after the earthquake.