Japan’s new Minister of Agriculture, Forestry and Fisheries, Shinjiro Koizumi, announced on the 10th that the government plans to release an additional 200,000 tons of reserve rice to stabilize prices. Koizumi said the rice will be distributed to large retailers, smaller supermarkets and specialty stores.
According to Kyodo News, 100,000 tons of the reserve rice was produced in 2020 and another 100,000 tons in 2021. After this release, Japan’s reserve rice stockpiles are expected to drop to about 100,000 tons.
Data released by the Ministry of Agriculture, Forestry and Fisheries on the 9th showed that the average price of 5kg bags of rice in Japanese supermarkets for the week of May 26 to June 1 was 4,223 yen (about 209 yuan), down 37 yen from the previous week. This marks the first consecutive two-week decline in rice prices since November last year. However, current rice prices remain above 4,000 yen per 5kg, double the price of the same period last year. Whether prices can be reduced to the government’s target of the “3,000 yen range” has attracted much public attention. Koizumi had previously said that rapid and concrete actions would be taken to achieve this goal.
Four Releases Since March Fail to Cool Prices
Since last summer, Japanese rice prices have continued to rise due to factors such as extreme heat causing rice harvest failures. In August last year, meteorological authorities issued an alert that the risk of a major earthquake in the Nankai Trough in the Pacific Ocean off eastern Japan had increased, triggering public hoarding of rice and a temporary “rice shortage”. Although the shortage eased with the appear on the market of new rice, prices have remained high.
Japan established the reserve rice system in 1995 to release rice to the market in the event of disasters or large-scale crop failures. Since March this year, the Ministry of Agriculture, Forestry and Fisheries has released four batches of reserve rice to stabilize prices, but with little effect. In May this year, the then Minister of Agriculture, Forestry and Fisheries, Takushi Eto, claimed that he “had never bought rice because supporters sent so much that it could be sold”, causing an uproar and leading to his resignation.
Daisuke Omaeda, deputy research fellow at the Comprehensive Policy Research Department of the NLI Institute for Economic Research, previously said that Japan’s agricultural policies have long aimed to prevent rice prices from falling, and the government has been very cautious about releasing reserve rice. Coupled with the fact that the government’s information collection and forecasting speed cannot keep up with rapid changes in supply and demand, institutional constraints, and the time required for inter-departmental coordination, it has been difficult to flexibly release reserve rice in emergency situations.
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