Sick swine, looming transport squeeze, Ebola fears poised to send prices skyward

The reduced purchasing power of the Japanese yen -- part of the anti-deflationary strategy espoused by Abenomics -- is to be blamed for higher prices on a number of imported consumer items.

But what about domestically raised pork? In August, reports Weekly Playboy (Nov 10), Kiyoken, the marketer of Yokohama's famous "Shumai" Chinese-style dim-sum, raised the price for a standard box of six pieces from 670 to 700 yen. Likewise, pot-sticker chain Gyoza no Osho raised its prices by 20 yen a serving.

The reason for these is that prices for a kilo of pork loin at the Tokyo Central Market have been going through the roof. This follows a worldwide trend, brought on by the spread of Porcine Epidemic Diarrhea (PED). The highly contagious disease is lethal in 50 to 100% of cases, and has already killed an estimated 7 million hogs in the U.S. In Japan it has spread to 38 of the nation's 47 prefectures and believed responsible for the deaths of some 400,000 as of August 2014.

Lack of oversight leading to poor sanitary conditions in which pigs are raised and transported are blamed for exacerbating the epidemic. As colder weather provides ideal conditions for the PED virus to spread, a source at the Ministry of Agriculture, Forestry and Fisheries tells the magazine it's likely the number of pigs might decrease at the rate of 6% a month during the October-December quarter, further pushing up pork prices.

As if that weren't bad enough, the government is projecting that the shortfall of commercial truck drivers might rise to 140,000 by next year. The figure has declined by 80,000 from the peak of 920,000 drivers eight years ago.

A survey by the Japan Truck Association found that 56.8% of its corporate members said they were currently suffering from shortages of drivers. In addition to the aging work force, many drivers are leaving for better-paying jobs in the construction industry.

From January 2015, new regulations aimed at driver safety and wellbeing will take effect: They will limit the number of hours behind the wheel to 13 hours per day, but of these, driving can only be performed for four hours consecutively. Companies found in violation of the new rules can be forced to suspend operation.

This law goes into effect just two months from now, and its impact is likely to be felt throughout the distribution industry -- in the form of slower service and higher prices.

Think the spread of Ebola in West Africa doesn't affect you? If you have bought a Meiji milk chocolate bar recently, you may or may not have noticed that its length and width have both shrunk by about 1 centimeter. Each "Chocoball" from Morinaga now weighs 24 grams, one gram lighter than it used to be.

Blame this on the price of a ton of cacao beans at the London market. From 1,960 pounds back in July, it had skyrocketed to an all-time high of 2,187 pounds at the end of September.

"It's because of Ebola," says Wataru Ikuta of the Tachibana Shoten trading firm. "Now, 60% of the world's output comes from Ghana and Cote d'Ivoire. Those countries have been free of Ebola so far, but the market has become nervous over what would happen if the epidemic were to spread there."

Should Ebola spread to the chocolate-producing countries -- where many Liberian migrant laborers go to help out bring in the harvest -- it is not too far-fetched to imagine world prices for chocolate could easily double. Which means many tasty treats and confections could vanish from store shelves for the duration. And definitely put a damper on Valentine gift-giving.

© Japan Today