Rice: Japan's weapon against rising prices
The government will auction 210,000 tons to reduce the price of a product that has risen by 90% in one year
Japan’s Ministry of Agriculture, Forestry and Fisheries will launch a first auction of 150,000 tonnes of government-stored rice on March 10. The product is expected to go on sale in supermarkets and other retail stores by the end of the month. According to Japan’s public broadcaster NHK, the government has decided to release 210,000 tonnes of rice – or 2.9 billion 65-gram bowls of the grain that is polished before cooking – to solve the distribution problem and lower the price.
These rice reserves were created in 1995, after a cold summer caused a major shortage of the grain for two years, with the aim of being able to deliver rice in emergencies when production dropped significantly. In 2011, the government defined the system for these funds: 200,000 tons are accumulated each year in 300 warehouses spread across the country and kept for five years before being sold. Until now, the reserves had been used only for emergencies due to poor harvests or natural disasters, such as the 40,000 tons delivered in response to the earthquake in eastern Japan in 2011 or the 90 tons for the Kumamoto earthquakes in 2016. prices.
According to the Ministry of Agriculture, Forestry and Fisheries, the price of five kilograms of rice in supermarkets last May was 2,100 yen (13.33 euros) and continued to rise until August. The Japanese government issued an alert in anticipation of a mega-earthquake, which led to a significant shortage of rice in some supermarkets, but the price increase did not stop. The week of February 9 this year, the price of rice was around 3,829 yen (24.31 euros), which is 1,811 yen (11.50 euros) more than the same period last year, representing an increase of 89% year-on-year.
Possible speculation
The ministry has attributed the price increase to the shortage of rice on the market. The inventory fell to its lowest level, although the harvest was 6.79 million tons of rice, 180,000 more than in 2023, which shows that there was a stock gap and that there was speculation on this product, since the main harvesting agents were obtained. Faced with this situation and rising inflation, the Minister of Agriculture, Forestry and Fisheries, Taku Eto, explained in a press conference on February 14 that, although it had been a difficult decision to make, they had no choice but to release reserves because prices are very high. The value is expected to fall in the medium and long term and then the government will try to buy back the auctioned amount within a year, in order to balance supply and demand.
"Japan has a very subsidized agriculture and to help it, we have to avoid competition from outside" explains Francesc Reguant, president of the Commission of Agri-Food Economics of the College of Economists of Catalonia. Rice in Japan has very high tariffs and has encountered an increase in demand due to a flood of tourism and an increase in pressure on Japanese food. "This has already been demonstrated here How olive oil rises when it is lacking. We buy less, but we continue buying much more expensive olive oil," says the president of the commission of the College of Economists, making an analogy with olive oil in Spain and rice in Japan. rice and not to overdo it. The release of more tons in the future is still unknown and will depend on the supply that occurs and whether prices fall.
