Financial Times Europe - 04.04.2020 - 05.04.2020

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LEO LEWIS—TOKYO

Cancelledbusinessdinners,postponed

dates,emptyryokaninnsandthesud-

denabsenceofgourmettouristsfrom

aroundtheworldhasgivenJapan’sgov-

ernmentacoronaviruscrisisitnever

envisaged:howtooffloadhundredsof

tons of succulent, perfectly marbled

Wagyubeefinahurry.

Japan is sitting on an embarrassingly

large surplus of the renowned A5-grade

meat from farms in Kobe, Matsusaka

and Yonezawa after attempts to ramp

up production to meet soaring tourist

demand and, eventually, to build an

export market.

Although accurate figures are not yet

available, the country’s cold-storage

facilities are filling rapidly, as coronavi-

rus has caused a sharp fall in visitors and

dining out, according to Japan’s National

Beef Cattle Advancement Fund Associa-

tion, a trade association. Prices are also

falling hard for a meat that could com-

mand as much as $500 per kg in happier

times, a representative added.

The ministry of agriculture is consid-

ering various ideas about how to deal

with the surplus, including “how to

encourage people to eat Wagyu”, said an

official. The current excess of Wagyu

beef, however, has created an immedi-

ate problem. It follows other unex-

pected gluts of luxury food: Murasaki

sea urchin, Echizen crab, Amadai tile-

fish and other delicacies that underpin

the country’s reputation as one of the

world’s culinary centres.

The problem is that these items are

normally consumed in restaurants that

are increasingly empty as the Japanese

— still not under formal lockdown —

avoid going out. For Tokyo, a city with

80,000 eating establishments, the blow

has been especially heavy. But the

changes seen in the Japanese capital are

now being marked in other cities.

Shops are looking to increase sales of

Wagyu. Aeon, Japan’s leading super-

market chain, said that it would add the

meat to a list of special items selling for

20-40 per cent below normal prices.

But supermarkets, wrestling with the

conflicting problems of panic-buying

and social distancing, are having to

tread a thin line: they cannot be seen to

be encouraging a rush of customers with

bargain prices.

Japan’s agriculture ministry decided

last summer to double its Wagyu beef

output to 300,000 tonnes a year over

the next 15 years. At the time, tourism

was booming and the now-postponed

Tokyo Olympics were a year away.

Japan’smeatindustryontherackafter

beefingupoutputoftop-qualityWagyu

© THE FINANCIAL TIMES LTD 2020
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AnalysisiPAGE 4;NotebookiPAGE 8

Debate on masks shifts as

Europe follows Asian lead

SATURDAY 4 APRIL/SUNDAY 5 APRIL 2020

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The coronavirus pandemic and lock-
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the global economy into the sharpest
downturn since the Great Depression,
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The US economy shed 710,000 jobs in
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The US employment numbers came
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20 years.

The situation prompted Kristalina

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of the coronavirus pandemic would be

worse than that of the 2008 financial

crisis.

“This is a crisis like no other,”

Ms Georgieva told a conference organ-

ised by the World Health Organization

yesterday. “Never in the history of the

IMF have we witnessed the world econ-

omy coming to a standstill. It is way

worse than the global financial crisis.”

Economists forecast even worse data

to come in April, with many now pre-

dicting double digit percentage declines

in output in the second quarter as vast

swaths of the world’s two most

advanced economic zones shut down.

Indices of activity by purchasing

managers in the eurozone, UK and

Sweden all fell about 20 points, from

levels indicating a majority of compa-

nies were seeing business activity

improving to levels below those seen at

the worst point of the 2008-09 financial

crisis.

Italy, the first European country to

go into lockdown, had the weakest

PMI on record with a figure of 17.4,

dramatically short of the 50 figure that

indicates an equal number of compa-

nies have reported rising and falling

activity.

The terrible data have led economists

to slash forecasts for global growth.

Bank of America now expects a contrac-

tion of 2.7 per cent this year.

With 10m initial claims for unem-

ployment insurance reported in March

in the US, economists expected weak

payroll figures — but the reality was

much worse than forecast.

David Riley, chief investment strate-

gist at asset manager BlueBay, said:

“Today’s report confirms, if this were

needed, that the US and global economy

is experiencing the most severe drop in

output and income in modern history.”

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3 USjobcrisisconfirmed 3 IMFsays‘worsethan2008’ 3 ActivityplummetsinEurope

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Page 9

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