Japan calls for 5000 tonnes of emergency butter

Japan has suffered a dairy meltdown and will import 5000 tonnes of "emergency butter" to ease shortages.

Japan - one of the wealthiest and most sophisticated food markets in the world - has run out of butter in its supermarkets.

The country's Ministry of Agriculture, Forestry and Fisheries is expected to import butter for commercial use from New Zealand, Australia and Europe.

"Domestic dairy companies continue to struggle to increase production and even if they do it is insufficient to cover demand," an official said.

The foreign butter is expected to arrive in the northern hemisphere autumn, just in time for the peak demand.

Japan tightly protects its farmers and the Global Dairy Coalition - a lobby group including Fonterra - has repeatedly complained about import tariffs of up to 500 percent.

But now a government-backed body will directly purchase the additional butter from overseas at low tariffs, and the Government asked the nation's four main dairy product makers to prioritise butter production.

Farmers have also been asked to boost supplies of raw milk for butter making to ease the shortage which has left gaps on supermarket shelves or forced shops to ration butter.

Fonterra's Japan-based general manager of trade for Asia, Philip Turner, last month warned high input costs and tight regulation were preventing the Japanese dairy industry from developing, and responding to changing consumer demand.

Price structures made it difficult for processors to switch from products in decline, such as liquid milk, to products in demand, such as butter, he told a Japan-New Zealand partnership forum in Auckland.

During the past year, neighbours such as China, Taiwan and India have all reduced tariffs to reduce consumer prices and ensure greater competition.

Mr Turner said Japan had a "managed" dairy market run by officials through a complex and non-transparent system of controls.

"When there is an abrupt change - for example an increase in demand for butter - the market is unable to respond," he said.

"The result is empty shelves - and consumers eat margarine".

Mr Turner said New Zealand could provide the kind of high quality, environmentally-sustainable, natural food and plant resources that Japan required.

Japan produces domestically only 39 percent of its own food, and just over 30 percent of its dairy requirements.

In dairy, Japanese demand is growing at 2.5 to 3 percent annually, while milk production has been falling since 1995, with liquid milk in long-term decline.

Milk production in Japan fell more than expected last year as an unusually hot summer exhausted cows.