(Japan) Japan's "rice shortage", new rice prices hit a 20-year high

Since mid-to-late August, supermarkets in many places in Japan have been out of stock and restricted in purchase of rice, and the "rice turmoil" has become a national topic. Since July, some brands of rice have taken the lead in cutting off their supplies. On August 8, after the Japan Meteorological Agency released a report on the huge earthquake in the South China Sea Trough, the tide of rice hoarding further spread, with large areas of rice shelves in Tokyo, Osaka and other places vacant.

The tight supply is the result of the superposition of many factors: the production of rice in 2023 will be reduced due to the intense heat and the quality will decline; The price of rice rose moderately compared with that of alternative staple foods such as bread, and the demand for household rice rose for the first time in ten years. At the end of June, the stock of rice in circulation dropped to 1.56 million tons, the lowest since statistics were available. The surge in tourists visiting Japan also continued to push up the demand for rice for catering.

In terms of price, the new rice produced in 2024 will be listed soon, and the predicted price of new rice in the main producing areas will rise by 20% to 40% year-on-year; in July, the Japanese rice consumer price index rose by 17.2 year-on-year, a new high of about 20 years. The Ministry of Agriculture, Forestry and Fisheries had previously decided not to put in government reserve rice on the grounds that the new rice would be listed in September and would disturb the market at this time. This statement caused controversy in Japan.

Although the annual consumption of rice in Japan has shown a long-term downward trend, the "rice shortage" has exposed its vulnerability to extreme weather, inventory management and changes in demand structure. The market is concerned about whether rice prices can stabilize after the large-scale listing of new rice in September, and whether the reserve rice delivery system needs to be adjusted.

Source: Japan's Ministry of Agriculture, Forestry and Fisheries; Kyodo News; USDA FAS, August 2024.