Japan’s wagyu beef exports to Cambodia tumble, bucking overall trend

Exporters ship more to other markets amid smuggling crackdown

TOKYO — Japan’s wagyu beef exports to Cambodia, once the biggest export market for the famous and pricey agricultural product, are declining significantly amid a tougher crackdown by Japanese authorities on smuggling.

The volume of wagyu beef exports to Cambodia shrank by about 60% in the January-August period of this year, compared with its most recent peak in the same eight-month period of 2021.

Cambodia is also said to be a “transit point” for wagyu beef smuggling into China, which regulates its imports. Japanese exporters have apparently squeezed shipments to Cambodia, as authorities step up their crackdown on inappropriate shipments overseas.

Japanese wagyu beef exporters are also apparently aiming to expand their sales channels while shifting shipments away from Cambodia toward other countries and regions, and diversifying their export markets.

Almost all of beef exported by Japan is wagyu beef, which features rich marbling, or fat streaks distributed throughout the flesh. According to trade figures released by the Japanese Finance Ministry, the country’s overall beef exports totaled 5,030 tonnes in the January-August period of this year, up 15% from a year earlier.

Shipments to Hong Kong, Taiwan, the U.S. and elsewhere grew, helped by a weaker yen. But shipments to Cambodia, which was the biggest export market for wagyu beef between 2019 and 2021, remain mired in the doldrums, bucking the overall trend.

Shipments to Cambodia amounted to 1,384 tonnes in the January-August period of 2021, their most recent peak, accounting for 29% of Japan’s overall beef shipments overseas.

But the volume of beef shipments to Cambodia has since lost steam rapidly, dropping to 458 tonnes in the January-August period of 2022 and 578 tonnes in the same eight-month period of 2023.

Cambodia is publicly known as a “smuggling route” to China, which imposed a ban on Japanese beef imports in September 2001 after Japan’s first case of mad cow disease, formally known as bovine spongiform encephalopathy, or BSE, was confirmed.

Officially, there have been no beef exports from Japan to China since then. Japanese government sources explained that “wagyu beef exported from Japan to Cambodia have been flowing into China as Cambodian beef.”

The Japanese government has encouraged wagyu beef exports amid a shrinking domestic market. As Cambodia’s conditions for accepting imports are lax, Japanese shipments to the Southeast Asian country as a transit point increased.

The biggest reason for a significant decline in Cambodia-bound exports is said to be a tougher crackdown by authorities on inappropriate shipments overseas. In fact, people who falsified the actual export destination of Cambodia-bound beef were arrested earlier this year.

Since before their arrest, market participants have said that authorities are strengthening surveillance on beef exports to Cambodia, as transactions increased excessively.

A slowdown in the Chinese economy is also believed to have encouraged the move by Japanese beef exporters to divert shipments to countries and regions other than Cambodia.

In the first eight months of this year, Japanese beef exports to the U.S. rose 13% from a year earlier to 779 tonnes and those to Taiwan also climbed 37% on a year-on-year basis to 951 tonnes. Exports to Macao also surged 90% to 103 tonnes.

The Japanese public and private sectors are aiming to expand wagyu beef exports. As shipments to Europe, the Muslim world and elsewhere are growing, the export destinations of wagyu beef have become diverse.

In the first eight months of this year, wagyu beef was exported to 44 countries and regions. During the same period in 2013, wagyu beef was exported to only 13 countries and regions.

For Japanese wagyu beef exporters, expanding their overseas sales channels is important amid a continued decline in the population and in demand at home.

One exporter said, “There are many regions we have not been able to cultivate yet. As the yen is weak now, we must increase the number of our customers as much as possible.”