Japan year-end review 2023: Growing on Imports

Imports between January and May

In April, Japan’s apparel imports were $1.8 billion – 6 per cent higher than April 2022, and 4 per cent higher than 2022 on YTD basis. In this import, share of Vietnam increased 2 per cent while China’s declined 7 per cent in comparison to 2021 performance. Despite de-growth, China still ended up being the largest apparel supplier to Japan, holding more than half of total imports with 51 per cent share during four-month period of January to April 2023. In comparison, Vietnam supplied only 16 per cent, whereas supply share of Bangladesh and Cambodia stood at 6 per cent and 5 per cent, respectively. The total import supplies from other countries to Japan bucked western trends as its diversification of supplier countries remained considerably less than those of the US, the UK and the EU. In May – the second month of FY24, there was a 10.8 per cent decrease in the imports of clothing and accessories, amounting to ¥221,877 million ($~1,535 million) when compared to May of last year. This formed 2.6 per cent share in the total imports of ¥8,673,913 million that the country received, as per the provisional trade statistics provided by the country’s ministry of finance.

Seven-month performance

For the six-month period of January to June, Japan’s clothing and accessories imports grew 9.6 per cent, reaching ¥1,577,021 million. While yarn and fabric imports registered a 1.6 per cent decrease, the textile machinery exports rose by 15.3 per cent. In the concluding month of the six-month period i.e. June, Japan trade witnessed a mixed scenario with 11.6 per cent de-growth in textile imports but a robust 30.2 per cent growth in machinery exports.

During the half-year period, Japan imported a total of 1.199 million tonnes of textiles and apparel and faced a cumulative y-o-y decrease of 5.7 per cent; but increased 2.2 per cent when compared to the previous half-year. In this import, China contributed 624 kt, decreasing 7.1 per cent cumulatively y-o-y. Japan’s major textile and apparel imports came from China and Southeast Asian countries, the top five being China, Vietnam, Indonesia, Thailand and South Korea. During the period, the textile imports from Myanmar grew rapidly with a growth rate of 24.8 per cent, and Vietnam increased by 3.7 per cent. However, those from other countries showed a decline.

In the seventh month of July, Japan saw a 0.5 per cent increase in clothing and accessories imports whereas the imports of yarn and fabric decreased by 14.1 per cent in comparison to same month in last year. At the same time, the textile exports dropped 2 per cent and textile machinery exports surged 15.1 per cent.

August delivered negative trade imbalance

In the eighth month of 2023, Japan’s textiles exports stood at ¥75.7 billion and imports amounted to ¥458 billion, resulting in a negative trade balance of ¥383 billion. In August 2022, the exports were valued at ¥77.8 billion, marking a decrease of ¥2.08 billion (- 2.67 per cent) in August 2023, while imports stood at ¥508 billion which delivered a deficit of ¥50 billion or negative growth of 9.84 per cent this year. During the month of August, the textiles were exported mostly to China (¥22.5 billion), Vietnam (¥8.54 billion), United States (¥7.2 billion), South Korea (¥3.22 billion), and Hong Kong (¥2.92 billion), and were imported mostly from China (¥249 billion), Vietnam (¥72.4 billion), Myanmar (¥17.7 billion), Indonesia (¥16.9 billion), and Cambodia (¥16.9 billion).

While the y-o-y decrease in textile exports was primarily due to a decrease in exports to China (- ¥1.47 billion or – 10.1 per cent), Vietnam (- ¥370 million or - 5.91 per cent) and Hong Kong (- ¥305 million or – 14 per cent), the decrease in imports was explained by a decrease in imports from Malaysia (- ¥516 million or – 19.5 per cent), Laos (- ¥209 million or – 46.3 per cent) and United States (- ¥166 million or – 5.46 per cent).   

Yagi’s traceability management system

Japan’s Yagi & Co. Ltd. (TOKYO: 7460) – a GOTS (Global Organic Textile Standard) member and one of Japan’s top companies in terms of the volume of internationally certified organic cotton handled, started operating a consistent traceability management system, from field to yarn. The proprietary management system links the international certifications for the organic cotton produced in India which the company handles. Though there are several international certifications and standards for organic cotton, for processes prior to the stage of ginning, the certification standard for organic agricultural products is applicable only to cotton balls and the field. Thus, the two different certifications make it difficult to achieve consistent traceability management for organic cotton, and has led to a large number of frauds related to organic cotton in India – the world’s largest producer of organic cotton. Yagi’s system enables consistent traceability management from the cotton field to thread. The system enables an incredibly transparent traceability for 85 per cent or more of the company-handled organic cotton. The company started distribution of products with its brand ‘Unito Organic’ encompassing yarn, textile and garment. Yagi can now provide certifications of this management to customers purchasing applicable organic cotton from the company. With group companies ‘Tsubame Towel’ which produces largest volume of organic cotton towel in Japan, and GOTS-certified Yamaya Orimono Co. Ltd. – specialising in yarn processing, organic cotton has transformed into an extremely important part of Yagi Group.   

India factor

Over the last five years, the Chinese garment exports to Japan have declined, presenting an excellent opportunity for India’s apparel industry to increase shipments. At the same time, it has provided a significant potential for Japanese trading companies to source from India. Currently, India’s share in Japan’s total import of $23 billion stands at 1 per cent which can increase further under the prevailing situation. Moreover, the duty-free access for Indian readymade garments post-Indo-Japan FTA, as against about 9 per cent for China and Turkiye, offers a big advantage.

At the time of this feature going into press, Japan was scheduled to conduct a total of 12 international conferences in the months of November and December before ending 2023. These conferences were to cover various aspects of textile and fabric manufacturing, including science, technology, waste management, quality standards, engineering, sustainability and fashion.

ALCHEMPro News Desk (WE SB)