Expert sees little effect on rice prices from release of reservesーNHK WORLD-JAPAN NEWS
If you’ve been with us this week, you know we’ve been tracking the latest efforts to bring down the price of rice in Japan. Retailers are being allowed to purchase directly from the government stockpiles and first it was major chains and now applications are open for small and midsized rice sellers. Yukov Kushima joins us now. So first of all, where do rice prices stand right now? Well, a good place to look is in the May inflation data for Tokyo that just came out. Its figures are seen as leading indicators of national trends. The price of rice is up about 94% from a year ago. Although the rate of increases leveled off a bit compared to recent months, the dinner table stable is still putting a big dent in household budgets. The cost of related products like oniiriti rice balls and sushi are still on the rise too. Amid this tough situation for consumers, the agriculture ministry has been taking steps to make rice more affordable. We are starting a new program with fixed price contracts so we will be able to distribute government stockpiles of rice to the widest possible population. After selling the rice reserves to big retailers earlier in the week, a total of 80,000 tons harvested in 2021 are up for sale through fixed contracts to smaller outlets. The ministry says 60,000 tons are available to the small and midsize retailers. The remainder will go to rice shops equipped with polishing facilities. Agriculture Minister Koisumi has projected that the retail price per 5 kilogram before taxes will be around 1,800 yen or $12.50. That’s less than half the price at supermarkets where Japan’s stable grain is typically now going for more than 4,000 yen. The transportation ministry is also supporting the distribution process. We will work with the agriculture ministry to make sure that rice distribution will not be stalled anywhere in the process. In the meantime, large retailers are beginning to receive their shipments. The operator of discount chain Doniote has purchased a total of 15,000 tons of stockpiled rice through fixedpric contracts. The company plans to start selling the rice in Tokyo from early June and then expand across the country. Retail giant Eon says it will start selling the rice at some of its stores in Tokyo from Sunday. The supermarket operator has bought 20,000 tons. A 5 kg bag will be priced about 2,100 yen including tax. Well, I talked to an expert about the distribution plan. He says the main point is that the government has changed the reason for releasing its rice stock piles. It’s now accepted that if the agriculture minister says the rice distribution system is not working properly, the government’s reserves can be released. But this gives the minister a lot of discretion. What’s more, the retailers do not have to sell the rice back to the government. That effectively means that the reserves will shrink. So in the long term, we will have smaller stockpiles during times of crisis. I think this can be seen as an issue of food security. Says bringing down the average price of rice is not a simple endeavor. Rice is not monolithic. It comes in varieties distinguished by where it was grown and grain type. It also has different purposes. Some goes to businesses, some to households, and it’s also processed. Now, this government rice is cheap. It’s like a product at a bargain sale aimed at getting people’s attention. I don’t think the overall rice price will come down much. I actually think popular brands will go up in price. In the longer term, Mgawa says we won’t see prices coming down from this level until at least 2028 if the current situation continues. If this was a normal product, people would stop buying it if the price gets too high. But this is rice. It’s a staple food for the Japanese. So, it’s special in that sense. People cook rice at home. It’s processed into other food and restaurants use it. It goes into sake and miso paste. So, even if the shortage of rice for consumers is resolved, it may not be for food processors. It will take some time for the whole rice industry to get back to normal. Well, consumers hope the drastic measures taken by the agriculture minister will lower their grocery bills, but it remains to be seen whether the availability of this amount of rice reserves can do That
The agriculture ministry started distribution to retailers nationwide through fixed contracts. An expert says this may not be enough to bring down sky-high prices. #japan #business #rice
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