Jumbo scallops are a favorite ingredient in classic sushi plates. They come from the northern Japanese town of Betsukai on the island Hokkaido.
The Japanese government has been urging the public to eat at least five bivalves a day for the last month to reduce the stocks that have built up since Beijing banned the imports in August.
The US military bases in Japan purchased hundreds of tonnes last week of scallops.
Takeshi Ise of Marui Sato Kaisan in Betsukai said, “It is probably the biggest shock to the industry in the last decade.” The embargo was introduced by China after Japan started releasing filtered contaminated water from Fukushima.
Investors said that, despite the pain felt by businesses, Beijing’s ban on exports could be a boon for the industry. It would allow it to consolidate and redirect its supply chain to target markets like the US.
Scallops were Japan’s top export food last year. They brought in Y=91bn, a 42 percent increase over the previous year. China is the largest buyer but, according to industry executives, only 10 to 15% of the scallops are consumed in China. The rest is processed and exported to South-east Asia and the US. Exports of Hokkaido-based seafood products directly to the US jumped to ¥1.6bn ($10.6mn) in September from ¥1mn the year before, as sales to China, much of which was previously for processing and re-export, fell to zero, according to customs figures.
“Japanese Scallops are said by many to be the best in the world. . . We will be able sell them,” said Motohisa Yoshimura. The chief executive at Yoshimura Food controls around 10 percent of the country’s market for scallops. Its share price has more than doubled in the last year, as the company has acquired smaller competitors.
Ise said, “Our challenge from next year will be whether the fishers, processing companies, and trading houses can come to an agreement on a price that Japan, the US, and other countries outside China can purchase the scallops.”
In July 2011, the molluscs were a geopolitical issue. This was one month before Japanese authorities started releasing 1.3mn tonnes treated water that was still mildly radioactive from the Fukushima Daiichi meltdown of 2011.
The International Atomic Energy Agency has approved Tokyo’s plan. However, China responded with a ban on Japanese seafood imports, which sent prices plummeting and caused inventories to build up, as the fisheries were offered low offers for their unsold stock.
The embargo that included Hong Kong also affected the vital processing industry in China.
Investors said that the furor over the trade ban obscured the fact that the business situation was bad before the ban.
The scallop industry suffered from many of the macroeconomic and demographic issues that plagued Japanese business.
The fishing and processing industries are experiencing a chronic shortage of staff. Current workers are aging and many groups do not have a successor for their elderly founders. Combined with the rising costs of equipment and a lack of funding to modernise outdated equipment, scores small businesses were on the verge of collapse.
like in other parts of corporate Japan rivalry and hostility has prevented consolidation between scallop companies. This is a solution to the industry’s problems.
One company is trying to change this. Yoshimura Food, over the last eight years, has acquired a portfolio that includes more than 30 regional companies and two major scallop-processing groups.
By retaining its staff, it has built a reputation for being a friendly and gentle consolidator of corporations with succession problems.
It has also raised the hopes of a Japanese champion scallop with a much greater global market share.
Yoshimura stated that in order to be able to negotiate at the same level as large Chinese processing companies, we must have a larger scale. “We are trying to create a marketplace where we can negotiate prices that are fair.”