David @ Tokyo

Over the new year's holiday (unfortunately it takes me until the middle of February to get around to writing about it) I enjoyed a relaxing time down in Shikoku.

Before I even start, I'll mention a complete aside to this - Kochi prefecture which lies on the South-Eastern side of Shikoku facing the Pacific was in the past an area where whaling apparently took off to quite a degree. And the Shikoku airport through which I transited contains souvenirs from the four prefectures of Shikoku island for travellers to conveniently purchase before they depart for wherever they came from or may be going. Getting to the point of this aside, a souvenir shop at the airport there stocks 3 types of whale foodstuff souvenirs from Kochi prefecture. I sampled the jerky offering (pictured to the right) on this occasion. It was not bad, but there is a Shimonoseki produced jerky offering that I prefer to it.

Getting back on track... while down in Shikoku I had a wealth of relaxation time, and with me I took a copy of Toyo Keizai's 2009 preview edition. (Toyo Keizai is a prominent economics magazine here, and when the financial world and subsequently the world economy collapses this stuff becomes especially interesting). Inside the magazine was a special section covering various economic indicators that currency strategists etc. spend their days pouring over for clues about where the economy is headed and where it has been.

Amongst all of these indicators was mention of "inventory ratio indices", and I thought about the application of this to the whale meat inventory statistics that I present each month.

The Nikkei newspaper's website had a useful definition / description of this particular economic indicator here; below is my translation (there are English descriptions elsewhere for sure though):

Inventory ratio index (在庫率指数)
Industrial production inventory volumes divided by shipment volumes.

Inventory is a result of production, and lags behind economic conditions. Further, inventory increases occur not only in the case of "products not selling", but also when "companies increase production". As such, economic conditions can not be judged by [inventory figures] alone. For that reason, inventory ratio indexes were created by combining inventory and shipment data.

During times of economic expansion, as shipments increase more than increases in inventory, the inventory ratio index decreases, and conversely during times of economic contraction it increases.

Often moves in advance of economic conditions.

As for whale, our basic product of interest, at least with respect to the current Japanese market, it is not the case that inventory is a result of "production" per se, as currently the main source of inventory is "by-product" from government sponsored special permit research programmes, in addition to relatively low levels of indirect by-catch and stranding. In all cases, the "production" of whale product is incidental in nature, and thus it does not hold that inventory would increase or decrease in response to economic conditions. Also, strictly speaking, inventories are believed to include volumes of small cetacean products as well as imported products from recently resumed international trade with those nations permitting commercial whaling operations. However dominating the current reality is incidental, non-commercial "production". Recall also that the bulk of the products available hit the official inventory statistics at two times in the year, coinciding with the return of the pelagic research vessels to Japan.

From the other side of the equation, the rational explanation for shipments to increase is due to increased consumption. The bulk of consumption is "commercial" in nature, although again, a fraction of the special permit by-product is set aside for "public purposes".

In this context I calculated basic inventory ratios for the figures available.

As seen in the graph below, the ratio is all over the place, and although one can look at specific months that stand out, overall it seems sensible to average the ratio over a series of months, using a simple moving average. So, also shown in the graph below is a 12-month SMA in green.


As we can see, back prior to mid 2006, there were some "weak" months where the ratio was well over 12. At a glance it appears that these months occur around the time after the JARPA by-product has hit the inventory figures, but before that by-product has gone on sale. That is, the high value of the ratio occurs in part due to the existing in inventory that isn't yet available for sale. One might attempt to try to correct for this, but well, I don't have time :)
In any case it's clear that the ratio by itself is quite spikey.

Averaged over 12 months (using MS Excel's default calculation method) we can see that the ratio has been hovering just above 6 since around July 2007. Given that whale meat "production" tends to occur at two times during the year, a ratio of 6 (plus a bit) seems to indicate good rates of consumption given current levels of supply.

Labels: stockpile figures, whale meat inventory statistics