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The price of rice in Japan has skyrocketed!

The latest data released by Japan shows that in July, the country's rice prices rose by 17.2% year-on-year, the largest increase in 20 years. Among them, Koshihikari rice rose by 15.6% and polished round-grained rice rose by 18.0%. In supermarkets and rice stores in Tokyo, Osaka and other places in Japan, rice supply is tight or even out of stock.

The rise in rice prices has a huge impact on the lives of Japanese people. Rice firmly occupies a core position in Japan's food culture, and the production of foods such as rice balls and sushi cannot be separated from it.

So why is there a sudden rice shortage in Japan?

Rice prices soar

According to Kyodo News, the Japanese Ministry of Internal Affairs and Communications released the national consumer price index for July, showing that rice prices rose 17.2% year-on-year, the largest increase in 20 years. The media reported that the hot summer of 2023 caused heat damage to rice, resulting in a decrease in the amount of rice on the market, and tight supply and demand caused price increases. Related products such as rice balls and senbei were also affected and prices rose.

Specifically, among rice categories, Koshihikari rice rose by 15.6%, and Japonica rice other than Koshihikari rose by 18.0%. The overall rice category recorded its largest increase since 19.5% in April 2004. In addition to the shortage of supply, the high demand for dining out by tourists visiting Japan also led to a rebound in consumption, and the tight supply and demand led to price increases. In addition, rice balls rose by 5.7%, and senbei also rose by 16.1%.

Electricity prices rose 22.3% as government subsidies ended. Kyodo News reported that July electricity prices were the largest increase in nearly 43 years since a 41.2% increase in March 1981, when electricity prices were affected by the second oil crisis. City gas prices also rose 10.8%. The government subsidy policy, which was intended to curb the burden of rising prices, ended in part in June, and prices rose.

In July, the cost of food in Japan, excluding fresh food, rose by 2.6%, but the increase was smaller than the 2.8% in June. Accommodation and mobile phone charges also rose, but the increase was smaller. Reflecting the price increase, housing and car insurance premiums also rose.

Supply is tight and supermarkets are out of stock

According to CCTV Finance, due to insufficient rice supply, rice prices have generally risen in Japan recently. In a supermarket in Tokyo, a 2-kilogram package of rice produced in Niigata Prefecture, Japan, is priced at about RMB 60, which is about 20% higher than before. In addition, the reporter recently visited a number of affordable supermarkets and found that some stores have begun to take purchase restrictions on rice to varying degrees.

A 120-year-old rice shop in downtown Tokyo, 75-year-old owner Koichi Ogawa said that the shop mainly sells more than 30 kinds of rice from about 20 production areas such as Hokkaido and Niigata. Every year, he signs a purchase contract with wholesalers in advance, and when the inventory is insufficient, he will purchase additional goods at the spot price. However, this year's temporary purchase price has increased by at least 50 yen (about 2.4 yuan) per kilogram compared with the contract price, so Koichi Ogawa decided not to restock, and currently 8 kinds of rice in the store are out of stock.

In a supermarket in Shizuoka, nearly half of the shelves dedicated to rice were empty. Eye-catching notices were posted on the shelves, reminding customers that due to the recent shortage of rice supply, the long-standing special promotions will be cancelled from June 1. Katsumi Masuda, the head of a supermarket in Shizuoka, Japan, said, "We used to have 10% off promotions every Sunday, or special sales for different products, but now we can't do that at all. We have raised the price of rice by about 20%."

According to the latest data released by the Ministry of Agriculture, Forestry and Fisheries of Japan, the market inventory of rice in Japan was 1.56 million tons at the end of June, a decrease of 410,000 tons compared with the same period last year. According to Japanese media, this is the lowest value since comparable data was available. The survey results of the Japan Rice and Grain Merchants Association also showed that about 85% of the rice sellers among the members of the association said that it was difficult to purchase goods, or even impossible to purchase goods.

What is the reason behind it?

Industry insiders believe that there are three reasons behind Japan's current tight rice supply and demand situation.

First, the Japanese government's production adjustment policy controls rice production. Considering the national situation that rice consumption is declining as the population decreases, the Ministry of Agriculture, Forestry and Fisheries controls rice production by providing subsidies to farmers who switch to other crops. In 2023, Japan's rice production was 6.61 million tons, a year-on-year decrease of 1.4%, a record low.

Secondly, extreme weather has reduced Japan's rice harvest. Most of the rice sold on the Japanese market was harvested the previous year. Japan's average temperature last summer hit a record high since records began in 1898. The extreme heat has caused the quality of rice to deteriorate, and Niigata Prefecture, a well-known rice producing area, has been particularly affected. Although inferior rice can still be eaten, the sales volume is limited, so the price of high-quality rice has risen accordingly.

Third, the number of tourists visiting Japan in the first half of this year hit a record high. Sushi, which is made from rice, has always been a favorite Japanese food for foreign tourists, and the demand for rice has increased accordingly. The Japanese Ministry of Agriculture, Forestry and Fisheries originally expected that rice consumption would decline this year, but the large number of foreign tourists who came to Japan after the depreciation of the yen and the return of the Japanese people's habit of going out to eat after the epidemic changed this expectation. Under the influence of these factors, the shortage of rice in Japan has gradually intensified since April this year, and the price of rice has risen rapidly since then.

New rice harvests have begun in various parts of Japan since August. According to Japanese media reports, in Miyazaki and Kagoshima prefectures, where the harvest was earlier, the advance payments made by local agricultural cooperatives to farmers increased by 40% to 50% year-on-year, while the corresponding increase last year was only 5% to 6%. An executive of a large Japanese rice distributor told the media: "There has not been such a sharp increase in the past 30 years." Emeritus Professor Oizumi Kazutsugu of Miyagi University said that as the new rice is harvested and flows into the market, Japanese rice prices are expected to fall in September and October.