Growth in Japan"s horticultural trade with developing countries : an economic analysis of the market

Although the industrialized countries currently dominate the horticultural trade, developing countries may have a comparative advantage due to the labor-intensive nature of this type of production. This study explores the possibilities for expansion of horticultural exports from developing countries to a rapidly growing single market -- Japan. During the 1980"s, Japan increased its horticultural imports by 12.5% annually in value. However, the developing countries" share of Japan"s market declined from 47% in 1980 to 39% in 1988, because they could not keep up with the rapid increases in exports of vegetables, particularly processed vegetables, from developed countries. Japan"s horticultural imports are subject to severe price competition, while other factors, such as sales promotions by exporters, have also played an important role. The growth of horticultural imports is also subject to Japanese policy. Exporting countries are particularly concerned about Japan"s phytosanitary regulations. The efficiency of domestic distribution in Japan is another concern, since distribution costs account for 50%-70% of retail prices for vegetables and fruit.