Workers placed kelp sea weeds on rice on the rice ball production line at Fuji Foods Co.’s processing plant in Shimizu, Japan on Friday, January 26th, 2024. Photographer: Hayashi/Bloomberg via Getty Images
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After months of rising rice prices, Japanese consumers may finally get some relief.
Data from Japan’s Ministry of Agriculture revealed that the average price of 5 kg of rice fell to 3,920 yen ($27.03) for the week ending June 15th.
This was also the first time that the target price set by Prime Minister Isba has fallen into targets.
In May, Isba promised to lower the price, reportedly believing that “it’s not right to stay in the 4,000-year-old range, so rice prices should be in the 3,000-hen range.” Isba also reportedly told opposition lawmakers he was personally responsible for the issue.
Rice is a hot button topic in Japan, with prices rising sharply and shortages leading to empty shelves in supermarkets across the country.
Careless comments on Rice cost him his work to the Minister. Taku Eto, a former Japanese farm minister, resigned in May and followed public outrage over his comments that he had obtained free meals from his supporters.
increase [in rice prices] This year, it was very dramatic from March to April. A few months ago, they’ve increased every day, perhaps a few hundred yen.
Prices for rice in Japan rose sharply in the second half of 2024 due to poor harvests in 2023 and high demand from tourists, further accelerating in the first half of this year.
Yoichi Ryu, a 26-year-old Tokyo resident, told CNBC on Friday that the surge in rice prices was severe.
He said the cost of a 5kg ice bag costing around 1,800 yen to 2,000 yen two years ago, but the price has more than doubled to 4,500-5,000 yen.
“The increase from March to April this year was very dramatic, so a few months ago, they’ve increased every day, perhaps a few hundred yen,” he added.
Government data revealed that rice prices more than doubled in May, surged by 101.7%, marking the biggest increase in over half a century.
Relieve shortages, but unevenly
However, there appears to be some light at the end of the tunnel for rice cultivation in Japan. In addition to the government’s release of rice reserves, retailers provide rice imported from overseas, such as the US and South Korea.
Supermarket Aion began selling rice provided by California on June 6th, saying the decision came amidst low domestic rice supply in Japan.
In April, Japan imported rice from South Korea for the first time since 1999, Bloomberg said. It was reported that in May, Korean food exporter O Global had signed an agreement to export 200 tons of Korean rice to facilitate Japan’s supply shortages.
The deal represents the largest amount of rice that private Korean companies have ever exported for general consumer sales in Japan, the Korean Times reported.
In response to a question from CNBC, Japan’s National Supermarket Association said Japan’s shortage appears to be eased “by the government’s release of rice stockpiles.”
However, supply recovery is uneven, with rice shortages persisting in some places. Roy Larke, a Japanese business professor at Tokyo-based intelligence firm Japanconsulting.com, told CNBC that some supermarkets around Tokyo still have empty rice, but these are small stores.
He added, “Some chains don’t seem to have any issues, and some local stores have rice.”
Yoichi said, “I remember recently, I went. [the] The supermarket bought to restock and buy rice, but they couldn’t buy it as they were just not there, but their price tag was still there. ”
Prices remain high amid quality concerns
Despite the rice making a comeback, prices still remain high. The National Supermarket Association said there is “no reasonable priced rice stock.” It appears that many stores don’t sell expensive rice.
Lalke stressed that there may be other reasons for this, saying, “It’s been a month since the government released its stockpiles, and the prices of branded rice have just begun to soak up, and it seems to be only a small amount now.”
When the Japanese government announced its emergency stockpile, it sold rice directly to retailers.
“The fact that it took a month for wholesale, branded rice prices to begin to decline is still beyond government targets. [of 2,000 yen per 5kg bag] It suggests that it could be more than just a supply and demand issue,” Lalke said.
Many consumers are concerned that the rice stockpile is old and not as tasty, he added.
Yoichi repeated the same sentiment, saying that the government’s grain stock is of poor quality compared to newly harvested rice stock.
In Japan, newly harvested rice is literally sold as a new rice, “Shinobi,” and is recognized as a better taste. There is even a legal requirement that only rice packaged by December 31 of that year will be allowed to be labeled “Shinmai.”
After harvesting the following year, the current crop is known as “comai” or old rice. Government reserves come from old crops, and terms like “Ko-ko-komai” (literally old old rice) are used to describe the crops of 2021.
A statement from Japanese central bank officials indicates that such a rapid increase is likely to ease in the future while keeping an eye on rice prices.
“Looking at recent data, consumer inflation has moved around 3%. But this is mainly due to rising import costs and rice prices… According to comments translated by Reuters, we hope that this pressure will be dissipated,” Boj Gagner kazuo Ueda said at a press conference.
