Few things reflect to what extent there is a crisis situation that the price of a basic product in the supermarket. In Japan, and in most Asia, Rice is a fundamental pillar of foodsupporting the life of much of the population. However, a combination of factors threatens the essential cereal. In Japan he has never been so expensive, and the government has made an unprecedented decision.
Tons of rice. Given the increase in rice due to distribution problems, the Japanese government has announced that, As of March, it will release 210,000 tons from its emergency reserve To stabilize the market. It is, therefore, The first time this reserve is used with the purpose of reducing pricesinstead of doing so for emergencies such as bad harvests or natural disasters.
The Minister of Agriculture, Taku Eto, emphasized that rice production has been enough to meet demand, but bottlenecks in the distribution have maintained high prices. In 2024, Production increased by 180,000 tons compared to the previous year. However, the amount collected by distributors fell into 210,000 tons, which suggests that Farmers and wholesalers retained stocks anticipating new price increases.
According to researcher Masayuki Ogawa at UTSunomiya University, The mismatch is due to the entry of speculative buyers They have artificially maintained prices without the benefits reaching producers.
Crisis factors. As we said at the beginning (And in past weeks), there are several. The price of a five kg package of Japanese rice has risen from 2,023 yen to 3,688 yen in a year. Causes? The 2023 record heat wave reduced agricultural yields and reserves, while consumption increased due to unprecedented tourism. Besides, The warnings of typhoons and earthquakes unleashed panic purchaseswhich led some retailers to limit sales.
To this we must add what we commented before. The harvest has not been bad, but quite the opposite, but everything indicates that farmers and wholesalers retained stocks anticipating new price increases.
Liberation strategy and expectations. To relieve market pressure, The Ministry will initially auction 150,000 tons of rice to agricultural and wholesale cooperatives, mostly composed of a grain of 2024, with a small part of 2023. Subsequently, another 60,000 tons will be releaseddepending on the impact of the first phase. The auction will take place in mid -March, which means that rice will begin to reach shops between the end of March and April.
The main objective is clear: Improve distribution without intervening directly in the market price mechanism. In this regard, Eto reaffirmed the government’s position that Prices must be regulated by supply and demandtrusting that the measure helps normalize the situation. In addition, the Ministry plans to replace (buy “back”) the amount released within the year, with flexibility in the deadlines according to the market reaction.
Impact on consumers and industry. While the measure is expected to reduce the price of rice, Ogawa warned that The decrease will not be immediate or uniform at all points of sale. Instead of directly impacting prices in supermarkets, released rice probably is destined for the prepared food industry, such as restaurants, hospitals and schools.
What is that reserve of the nation. Japan implemented its rice reservation system in 1995, after the supply crisis caused by an unusually cold summer in 1993. Since then, since then, since then, The government maintains a stock of approximately one million tons and are stored in some 300 facilities nationwide, annually renewing 200,000 tons to guarantee the supply in emergency situations. In fact, a warehouse in Saitama, near Tokyo, allowed access to media before the ad, Showing 20,000 tons of rice, enough to fill 300 million bowls.
In the past, these reserves have been used after natural disasters such as the earthquake and tsunami of 2011 in Tohoku and the Lady of Kumamoto in 2016. Now it remains to be seen that the movement has effect and the stabilization in the distribution is containing the price increase In the medium term.
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