Japan's squid stocks were below 40,000 tonnes at the end of May, down 7 per cent from the previous month and a record low, as fishing in most squid fishing areas continued to be weak.

Argentina and South Korea, both major squid exporters to Japan, sharply reduced their shipments to Japan in the first half of this year compared with the same period last year.

The shortage of raw materials could seriously affect squid production in Japan. This is supposed to be the peak season for squid production, but there are concerns about squid catches in the North Pacific and off Japan. About 10 years ago, the benchmark stock of squid was 100,000 tons. In recent years, the standard has been lowered to 70,000-80,000 tons. Even when stock standards tend to decline, summer inventories below 40,000 tonnes are considered abnormal.

Stocks of common types of squid, including Argentine squid, stood at 17,226 tons at the end of May, down more than 10,000 tons from 27,919 tons in 2015. Typically, stocks continue to fall in June and July, and the low stocks are made more apparent by weak catches.

Due to the shortage of raw materials, squid processing companies are facing stagnant production and depressed revenues. The Japan Squid Processing Federation plans to ask the government to expand import quotas to make up for the shortage of squid caught in the country. This request has been orally communicated to the fisheries Department and will shortly be formally submitted to the Government in the form of an official document.

On the surface, the rate of consumption this year appears to be low, but information suggests that contracts have actually been increasing. If overseas fishing improves, the industry will consider handling sudden demand orders on its own, people familiar with the matter said.