(Bloomberg) — Japan will sell 210,000 tons of rice from its emergency stockpiles as households are paying record prices for the grain.
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The average retail price for 5 kilograms of rice surged 82% to 3,688 yen ($24) in the week of Jan. 27th compared with a year ago, according to the Ministry of Agriculture, Forestry and Fisheries.
The Japanese government heavily regulates the country’s rice market and imposes significant tariffs on imports. Problems in the distribution system have led to increased prices despite an improved harvest last year, Chief Cabinet Secretary Yoshimasa Hayashi said at a press conference on Friday.
The 210,000 tons is about 3% of the country’s forecasted annual demand, according to Bloomberg’s calculations. The government will offer the first tender for 150,000 tons, equivalent to about a month’s sales by distributors, in early March and delivery should start in the middle of the month. The amount sold will be increased if necessary, the ministry said.
The price of rice has also been affected by a spike in demand last year, according to Katsuhito Fuyuki, a professor of agricultural market studies at Tohoku University. There was panic buying after the government warned in August of a potentially devastating earthquake in the Nankai Trough off the coast of southern Japan.
The stockpiling system was introduced in 1995 in response to a poor harvest in 1993. The government stockpiles about 1 million tons of rice.
“The closed nature of the market is problematic,” said Tohoku University’s Fuyuki. “It’s possible this will spur calls for a reduction in tariffs.”
The Bank of Japan mentioned the higher cost of rice as a factor in the upward revision of its forecast for prices when it raised interest rates in January.
The expensive rice in Japan comes even as global prices sink. Wholesale costs for Thai white rice, an Asian benchmark, fell to the lowest since 2022 this week.
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