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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PHILIP GEORGIADIS— LONDON


The coronavirus pandemic and lock-
downs imposed by governments on
both sides of the Atlantic have pushed
the global economy into the sharpest
downturn since the Great Depression,
data released yesterday signalled.
The US economy shed 710,000 jobs in
early March, ending 113 months of con-
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were far worse than economists had
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The US employment numbers came
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The situation prompted Kristalina
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of the coronavirus pandemic would be
worse than that of the 2008 financial
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“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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