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Friday, Jan. 27, 2012
Hokkaido racehorse breeders bet on China
With domestic tracks closing down, industry looks overseas
By KEITA FUNAKI
SAPPORO — Business has been lean over the years for many of the horse breeders in Hokkaido, Japan's leading region for producing thoroughbreds, as the popularity of racing declines.
But breeders now see a ray of hope in China, where an increasing number of wealthy people are aspiring to own their own racehorses and thus acquire a new status symbol.
"The Chinese public is showing growing interest in racehorses," said Han Guocai, vice chairman of the China Horse Industry Association, who was on a visit to a horse ranch in the Hokkaido town of Shinhidaka in December.
"Gambling on horse races is banned in China, but that ban could be lifted in the future," he added while taking a close look at the sinewy bodies of some thoroughbreds.
In China, the owner of a horse that wins a race gets the prize money offered by the race sponsor, according to Hokkaido prefectural officials.
Japanese horses are known for their speed, so they are popular among affluent Chinese, the officials say.
Han and four other Chinese visitors went to Hokkaido ranches and the Nakayama Race Course in Chiba Prefecture, escorted by members of the Japan Association for International Racing and Stud Book, an affiliate of the Japan Racing Agency.
They wanted to learn how Japanese breeders raise their horses and procedures necessary for trade in the animals.
Breeder Norihisa Maekawa took heart from the Chinese visit to his ranch, hopeful for significant demand from abroad, which would stand in stark contrast with the situation in Japan. Maekawa ships an average of about 30 horses a year to other countries.
There were just 7,000 or so thoroughbreds and other lightweight horses used for racing raised last year in Japan, a far cry from the 1992 peak of 12,800, as tracks in smaller cities around Japan shut down for lack of business.
The slump in demand has dealt a particularly severe blow to breeders in Hokkaido, who raise more than 90 percent of Japan's total.
On the other hand, exports to China began to increase rapidly in 2010 and Japan to this point has sold 124 horses to buyers in the country.
"The Chinese market is promising because Chinese buyers tend to purchase a large number of horses at a time," said Norihiro Sakuta, an official with a stud breeders' cooperative in the town of Urakawa.
One wealthy Chinese bought 18 horses for some ¥47 million in 2010 when they were put on the block in Shinhidaka and another 10 horses went to another Chinese buyer for about ¥16 million last year.
"Turnover is still low, but the market should become energized as the number of bidders grows," Sakuta said.
Han of the China Horse Industry Association said Hokkaido breeders possess sophisticated knowhow and Japan's proximity to China compared with other major horse-producing countries helps.
Eager not to miss out on a new business opportunity, a delegation of Hokkaido breeders went to China in December and ironed out terms of transactions with a state-run livestock trading firm.
One major stumbling block for bilateral trade is quarantine regulations.
"Horses (being sold from Japan to China) are required to be quarantined for more than 100 days, which raises the costs that buyers have to pay while their horses are in quarantine," said Naoyuki Sunaga, an official in charge of international exchange at the Japan Association for International Racing and Stud Book.
"The quarantine period needs to be shortened if horse exports to China are to be boosted."
Kumamoto milk exports
KUMAMOTO — Dairy farmers in Kumamoto Prefecture are intensifying their efforts to boost milk exports to other parts of Asia.
Milk produced in Hokkaido dominates Japan's export business because of its brand cachet, but producers in Kumamoto are striving to blaze a new trail overseas.
It could be a lucrative move, considering the trend toward globalization, including Japan's possible signing on to the U.S.-led Trans-Pacific Partnership free-trade deal.
Kumamoto farmers export long-life milk that doesn't need to be refrigerated. The Kumamoto Dairy Cooperative Association first entered the Hong Kong market in February 2007, after which it began business in Taiwan and Shanghai.
Exports to Singapore have also started up.
Kumamoto produces about 240,000 tons of raw milk per year, making it the largest producer in western Japan. But only a fraction is sold abroad — just 90 tons in fiscal 2010 when exports peaked, according to the dairy association. Hong Kong has been the primary market.
Finance Ministry data on the other hand show that Hokkaido accounted for 2,700 tons of Japan's total of 2,900 tons in exports in fiscal 2010.
Japanese milk producers, meanwhile, are desperately trying to turn around their business.
While domestic sales have been stagnant, radiation fears fanned by the disaster at the Fukushima No. 1 nuclear power plant badly hurt overseas demand.
In the face of the tough times, the Kumamoto association is setting its sights on countries such as Malaysia and Vietnam where Hokkaido milk producers have yet to gain a foothold.
"We hope to push further into Asian markets to boost the morale of local milk producers, whose number is declining," an association official said.