07 Dec

CBD, Hemp Fiber, Seeds and Oil: Meros – USDA report series on Japan’s market for hemp-derived products released

Posted by Lucia Vancura in Market Trends, Publications

Anyone exploring the shops and cafes of Japan’s major cities in the past two years has certainly noticed the explosion of CBD products on retail shelves, online shops and in a growing number of cafes. CBD consumer products range from tinctures and gummies to cosmetics and even pet products, some imported and some manufactured in Japan using CBD raw materials primarily from the U.S., China and the EU.

While CBD products are a major current trend, interest in the Japanese market for a variety of hemp-derived products has grown dramatically in the past few years.Hemp seed and hemp seed oil appear poised for growth in the Japanese health food sector; longer term, there may be opportunities for hemp fiber in construction, insulation and plastic.

Meros recently teamed up with the U.S. Embassy Japan to develop a series of reports on the Japanese market and import regulations for hemp-derived products, to serve as a resource for U.S. exporters planning their business development in Japan.  The 2018 U.S. Farm bill  legalized the production of industrial hemp in the U.S., defined any cannabis plant or derivative thereof, that contains not more than 0.3 percent delta-9 tetrahydrocannabinol (“THC”) on a dry-weight basis. This authorization of production in the U.S. has brought optimism that a new commodity crop can be developed in the U.S., with a wide range of uses in industrial, feed and wellness markets and potential for export to global markets.

While Japan has a long history of hemp cultivation, today Japan’s domestic hemp use is mainly limited to fiber for traditional uses linked to the Shinto religion, such as shimenawa ropes decorating shrines or the belts of top ranked sumo champions. To grow cannabis in Japan, a cultivation license is necessary and as of 2019 there were only 35 licensed cannabis cultivators, primarily in Tochigi Prefecture, and a total of 9 hectares under cultivation. There is little expectation that this number will increase in the near term.

And yet industrial hemp has a wide potential range of uses in Japan from seeds for human and animal consumption, fiber for use in apparel, building insulation, plastics and construction materials to hemp extracts such as CBD and other cannabinoids in cosmetics and wellness products.  It is expected that these raw materials will need to be imported to Japan; this makes it essential for potential hemp product suppliers to have a deep un

Under Japan’s legal regulatory framework, the Cannabis Control Act bans importation of “cannabis”. The Act defines ‘cannabis’ as “the cannabis plant (Cannabis sativa L.) and its products. However, mature cannabis stalks and products made from stalks (excluding resin, which is illegal), as well as cannabis seeds and products made from the seeds are excluded from this legal definition of “cannabis”. Japan has a zero-tolerance level for tetrahydrocannabinol (THC) in any product.

The Cannabis Control Act does not explicitly mention THC, however, in practice, the Ministry of Health, Labour and Welfare (MHLW) interprets the presence of THC in a product to mean that parts of the cannabis plant other than mature stalks or seeds were used.Unacceptable parts include flowers, buds, leaves, immature stalks, or roots.

Exporting hemp products to Japan, therefore, requires various documentation and administrative steps in order to comply with the import regulations for legal hemp products.

In this new series of reports, Meros not only looks at the current market dynamics of each product category, but also examples of the import flow and documentation required for hemp fiber, hemp seed, hemp seed oil, CBD and hemp extract products.

Further regulatory changes are expected Japan’s hemp product market in the coming years, so success as a supplier to Japan’s hemp product markets will require on-going observation of the changing dynamics of each market and potential changes in regulation. As always, strong relationships with importers and partners in Japan will be critical for suppliers to navigate these dynamic markets.

The series of reports can be found at the following links:

The Japanese Market for Hemp Fiber

The Japanese Market for Hemp Seed and Hemp Seed Oil Products

The Japanese Market for CBD and Hemp Extracts

27 Sep

Meros – USDA Food Export Guides to Japan Online Now

Posted by Team Meros in News, Publications

Meros recently teamed up with the US Embassy Japan’s Agricultural Trade Office (ATO) to develop a series of export guides that detail the regulatory requirements for 24 specific products, from cheese to chocolate, herbal tea to wine. While the aim is to support American SMEs who are interested in exporting food products to Japan, the detailed guides can be of interest to food exporters of all levels of experience.

Exporting to Japan can seem daunting with numerous required forms and official resources not always available in English. In these guides, we take potential exporters step-by-step from pre-embarkation to import clearance and lay out the expected forms and preparations necessary at each stage.

For new food exporters to Japan, common challenges include differences in food additive standards which may mean a product that is allowed for food products in the home country may not always be allowed in Japan.  Japan’s strict, low tolerance standards for agrochemical residues (MRLs) also trips up some potential exporters.  These guides aim to point out some of these common pitfalls in advance, so exporters are better prepared. They are not meant as “do-it-yourself” guides but as a tool to help exporters better navigate the export process together with their Japanese importers and distributors.

We provide examples of required ingredients lists, manufacturing process charts as well as labelling for each type of product – but it is important for exporters to always keep in mind that requirements can change without notice – especially whenever sanitary or phytosanitary risks are involved.  Ultimately, a successful export business to Japan require ongoing vigilance for regulatory changes, as well as strong relationships with importers and partners in Japan.

All guides are available here: https://www.usdajapan.org/export-guidance/

01 Feb

New study projects CPTPP and Japan-EU trade agreements will reduce US dairy exports to Japan and boost competitors

Posted by Team Meros in News, Publications

A Meros Consulting study released Wednesday by the U.S. Dairy Export Council projects that the two new trade agreements made by Japan will benefit global dairy suppliers such as the EU and Oceania, while costing the US dairy export industry billions of dollars in lost sales.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force on Dec 30, 2018 and the Japan-EU Economic Partnership Agreement (JEEPA) went into effect today, February 1st, 2019. All major dairy suppliers to the Japanese market, including Australia, New Zealand, Canada, the Netherlands, Germany, Denmark, Ireland and France, are included in one of these two agreements. Only the United States is missing, after pulling out of TPP negotiations in January, 2017.

Through industry interviews to assess price sensitivity and product substitutability, together with extensive historical data analysis, Meros developed a model to quantify the future economic impact of those agreements on key U.S. dairy products and ingredients over the next two decades. The study showed that the US could double its market share with a level playing field. However, without quick action by the US to regain competitiveness in the market, US dairy exports will be at a strong competitive disadvantage, particularly for cheese, whey and lactose, resulting in lost US sales of $5.4 billion over 21 years.

Now is a particularly critical time for global cheese suppliers to Japan as Japan’s cheese imports are expected to show a 1.6-fold expansion over the next 10 years under CPTPP and JEEPA. As a result, the US dairy industry is supporting further bilateral trade talks with Japan. As USDEC CEO and President Tom Vilsack commented in a January 30th news release, “U.S. dairy farmers and processors strongly support the Administration’s launch of trade talks with Japan. We hope this report provides fresh ammunition to our negotiators about why a strong U.S.-Japan agreement is so important for American agriculture.”

U.S. Dairy Export Council’s release of Meros Consulting’s Analyzing the Impact of the CPTPP and Japan-EU EPA on US Dairy Exports to Japan can be downloaded here:

Analyzing the Impact of the CPTPP and Japan-EU EPA on US Dairy Exports to Japan