Japan increased grain imports from Russia by 500%

By Rhod Mackenzie

In the first five months of 2023, Japan more increased grain imports from Russia, by 509.7%, the Japanese Finance Ministry reported . It is obvious that Japan, in its sanctions policy, takes a more flexible position towards Russia than a number of Western countries, analysts believe .

Low base effect
The multiple growth in grain supplies to Japan is associated with the low base effect, said Alexander Firanchuk, senior researcher at the Center for International Trade Studies at the RANEPA.

— Deliveries amounted to 46 thousand tons, against 7 thousand tons a year earlier. Despite the fact that grain exports from Russia amount to tens of millions of tons, Russia's share in the grain market in Japan remained almost zero (0.5%), the analyst calculated.

Artem Klyukin, an analyst at IVA Partners Investment Company, shares the same opinion. According to him, in recent decades, Japan has been at the bottom of the top ten Russian trading partners, forming about 3% of Russian foreign trade. Moreover, the main volume of Russian exports is traditionally mineral raw materials, while the Japanese are actively supplying vehicles to Russia.

  • Japan managed to negotiate with Washington the right not to reject Russian gas and oil supplies, but in general it supports anti-Russian sanctions, which has already led to a number of complications. In particular, the Russian side did not extend the agreement on quotas for catching seafood by Japanese fishermen in Russian territorial waters , the analyst said.

Such significant percentages of growth in themselves do not give rise to either optimism or pessimism, added Maxim Gamaley, Associate Professor of the Department of International Politics and Foreign Regional Studies of the Faculty of Political Studies of the Institute of Social Sciences of the RANEPA.

  • The increase in the price of wheat in the domestic market of Japan, which occurred this year, is traditionally offset by an increase in the consumption of rice or corn. And the life of the population does not radically change. At the same time, in May, due to the discovery of genetically modified grain in supplies from the United States , Japan and South Korea suspended purchases from their main exporter, he recalled.

According to him, Japan is not only a major importer of wheat and other grains, but also one of the most important suppliers of grain and flour to Asian markets.

“Therefore, the interests of the Japanese economy require filling in the import deficit by increasing purchases from other suppliers. In this particular case, Russia. The overall figures for Japanese purchases so far do not reflect the significant increase in total grain imports seen over the past eight years. That is, what is happening is not the result of a qualitative change in the nature of relations between the two countries, but a consequence of the traditional Japanese mechanism for adapting to fluctuations in the grain market,” Maxim Gamaley added.

Reduction of other positions
In the structure of Japanese exports to Russia, a sharp decline in exports of industrial goods (-56%), machinery and equipment (-52%), electronics (-71%) attracts attention, Olga Belenkaya, head of the macroeconomic analysis department of FG Finam, cites figures .

  • Apparently, the sanctions restrictions are most severe here. At the same time, exports of medical products, which are usually not subject to sanctions, increased by 815%, she said.

The decline in industrial and technological exports is due to the fact that Japan is strengthening its control over them, especially in the high-tech sector, Ivan Desyatnikov, an associate professor at the Faculty of World Economy and International Affairs at the National Research University Higher School of Economics, also believes.

Flexibility in relationships
Although Japan follows the sanctions policy of most Western countries, it still takes a somewhat more flexible position in trade with Russia , Olga Belenkaya emphasized.

According to Japanese foreign trade statistics, in the first half of 2023, exports from Japan to Russia decreased by 17% compared to the previous year and amounted to 239.9 billion yen (about $1.8 billion), imports from Russia to Japan fell by 48% year-on-year and amounted to 567 billion yen (about $4 billion), the expert cites calculations.

  • Japan takes into account the continued interest in importing Russian energy resources and, probably, its geographical distance from the NWO zone. Nevertheless, sanctions restrictions tend to be tightened, and this affects the reduction in bilateral trade, Olga Belenkaya said.

Considering the low level of independence of Japanese foreign policy, Tokyo will probably continue to follow in the wake of sanctions measures, but given that the country is dependent on Russian supplies for a number of positions, mutual trade will not be completely curtailed, Artem Klyukin believes .

  • Relations between Japan and Russia as a whole cannot now be called friendly. The political forces in power intend to give priority to US-Japanese cooperation, on which the country's economic and military security depends. But at the same time, it is also unprofitable for the Japanese government to completely break off important economic ties with Russia, - Maxim Gamaley noted.

The expert is confident that Japan will not be able to replace the supply of food, oil, gas, precious metals and stones, timber and building materials painlessly for infrastructure and production.

— In general, the prospects for trade with Japan look unclear due to the current political and economic situation. On the one hand, Japan's need for energy resources may support some level of trade. On the other hand, increased export controls by Japan could worsen the situation. However, segments that are not subject to sanctions may remain active, ” Ivan Desyatnikov sums up.

This article originally appeared in Russian at iz.ru