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This report highlights Japan’s food processing industry, notable trends, and a new market snapshot of western Japan processors. The industry benefited from a slightly higher exchange rate in relation to the dollar in 2021, compared to 2020, allowing the industry to experience marginal growth by value, totaling $216.4 billion.

The combination of COVID disruptions and Highly Pathogenic Avian Influenza (HPAI) outbreaks led to a 1.8 percent decline in EU (European Union) chicken meat production in Calendar Year (CY) 2021. Despite ongoing HPAI outbreaks, easing COVID restrictions will likely result in a 0.2 percent increase in EU chicken meat production in CY 2022.

On May 2020, the European Commission announced a revision of the legislative framework for Geographical Indications (GIs) as part of the European Union (EU) Green Deal’s Farm to Fork Strategy.

FAS Tokyo projects Japan’s overall demand for feed grain to remain robust in MY2021/22 and MY2022/23 as livestock production expands. FAS Tokyo anticipates corn imports to decrease in MY2021/22 and MY2022/23 as feed millers increase the ratio of low-cost rice at the expense of corn in compound feed.

The Japanese Diet is poised to allocate a combined total of 3.2 trillion yen ($27.7 billion) to the Ministry of Agriculture, Forestry and Fisheries (MAFF) from the Government of Japan's 2021 supplementary budget and 2022 annual budget. MAFF's budget will see increased funding for export facilitation, smart agriculture development, and implementation of MAFF's Green Food System Strategy.

Hong Kong continues to take random tests on imports of chilled and frozen foods and their packaging for the COVID-19 virus.

Cattle stocks are projected to expand in 2022 as slaughter slowed in late 2021. In the dairy sector, cow slaughter is likely to increase in 2022 to lower excess milk production.

The European Commission is banning titanium dioxide (E171) as a food additive in the EU, starting with a six-month phasing out period as of February 7, 2022, until August 7, 2022, after which a full ban applies. Following the publication of Commission Regulation (EU) 2022/63 in the EU’s Official Journal (OJ) on January 18, 2022, Annex II and III to Regulation (EC) No 1333/2008 on food additives will be amended accordingly.

Both EU beef and pork production are forecast to decline in 2022. The lower domestic beef production is caused by a shrinking dairy herd with higher milk deliveries but a lower output of animals for slaughter.