US JUICE PROCESSORS SET SIGHTS ON JAPAN IMPORT QUOTA TO END IN APRIL

US JUICE PROCESSORS SET SIGHTS ON JAPAN IMPORT QUOTA TO END IN APRIL

Japan will lift import restrictions on orange juice April 1, letting U.S. processors freely compete for a market projected to reach $1 billion a year, or 250 million gallons, by the end of the decade.

Florida juice processors, who currently export 10 million gallons a year to Japan, expect their sales to triple in the first year after quotas expire.By 2000, they hope to export 60 million gallons a year to Japanese consumers, who now drink less than six-tenths of a gallon a year, a far cry

from the more than 5.2 gallons per capita consumed in the United States.

Brazil, the world's leading orange juice exporter, currently supplies Japan with nearly two-thirds of the juice that comes in under the quota system, according to Japanese Ministry of Finance statistics.

Japan's quota for orange juice imports was 50 million gallons for the fiscal year ended March 1. Under a 1988 trade agreement with the United States, Japan agreed to scrap the quota.

"U.S. processors realize they need to find more outlets for products,"

because U.S. orange production is projected to rise from 138 million boxes of the fruit this year to a record high 200 million boxes by 1995, said Dan Gunter, executive director of the state-run Florida Department of Citrus.

The Japanese market consumes primarily juice drinks that are blended from concentrate, Mr. Gunder said. Brazil dominates the market as the low-cost producer.

Japan's quota system made it easier for processors to import juice if they blended it with the domestic Mikan variety, according to Takaichi Nagayama, managing director of the Japan Fruit Juice Association. The importers therefore attached more importance to cost than taste, Mr. Nagayama told Knight-Ridder Financial News.

Florida's Mr. Gunter expects that, as the Japanese become increasingly health-conscious, consumption of 100 percent imported juices will soar. U.S. juices, he said, are of a higher quality than the competition's.

"The Japanese are very, very demanding, and in taste tests, have chosen our product hands-down next to Brazilian juice," said Peyton Dekker, national sales manager for Juicebowl Inc. of Lakeland, Fla.

"It's going to be a quality war" after liberalization, Mr. Nagayama was quoted as saying, arguing that Japanese consumers favor Florida orange juice over Brazilian product.

To expand the small U.S. foothold in the Japanese market, the state of Florida is launching a $1.4 million marketing, advertising, and public relations campaign aimed at enhancing the image of U.S. juices in Japan.

U.S. companies will be facing competition there not only from Brazilian exporters, but Mexican exporters as well.

Mexico's orange juice exports to the United States increased more than 600 percent between 1979 and 1989. Although the country now produces just 3 percent of the world's orange juice, it is rapidly expanding its production capacity. In interviews, Mexican officials have said they would aggressively tap the Japanese market when quotas are lifted.

"Mexico has the potential to be a major supplier," Mr. Gunter said.

Brazil, which produces nearly 60 percent of the world's orange juice, exported more than 1.3 billion gallons last year, dwarfing total U.S. exports of just 97 million gallons.

U.S. processors squeezed and blended more than 800 million gallons of juice last year, but that figure is expected to rise beyond 1 billion gallons by 1995, when trees planted after a devastating 1989 freeze reach maturity.