Japan Releases 300,000 Tons of Rice to Combat 100% Price Surge

Japan's rice prices have been soaring, prompting the government to release a new plan to inject 300,000 tons of reserve rice into the market. The aim is to stabilize the historically high prices through direct supply to retailers. This move comes after the previous agriculture minister, Kento Eto, resigned following controversial remarks about never buying rice, which sparked public outrage.

The price of rice in Japan has been on a steady rise since the summer of 2024. In August of the previous year, warnings of a potential earthquake in the Pacific Ocean off Japan's eastern coast triggered panic buying, leading to a temporary rice shortage. Although the situation eased with the arrival of new rice, prices remained high. According to data released by the Ministry of Agriculture, Forestry and Fisheries on May 26, the average price of a 5-kilogram bag of rice in supermarkets reached 4,285 yen (approximately 214 yuan) during the week of May 12-18, marking a new high and doubling the price from the same period last year.

The rising cost of rice has had significant impacts on various sectors. In some regions, school lunches for elementary and middle school students have been affected, with some schools planning to reduce the frequency of rice servings and replace them with other staples. Additionally, there have been reports of rice theft in multiple areas, causing economic losses for farmers. Some farmers have resorted to placing tracking devices in rice bags to prevent theft.

As rice prices continue to climb, an increasing number of Japanese tourists visiting South Korea are bringing rice back home. A supermarket manager in South Korea noted that while domestic rice consumption decreased last year, leading to a drop in sales by about 10%, recent trends show an increase in rice sales, largely due to Japanese tourists.

Kento Eto, the former agriculture minister, made headlines with his remark that he had never bought rice because his supporters had given him so much that he could sell it. This statement drew widespread criticism, with opposition parties labeling it inappropriate and questioning his fitness for the role. Eto later apologized and resigned on May 21, citing the need for someone more suitable to handle the critical task of controlling rice prices during this period.

Following Eto's resignation, the government appointed former election strategy committee chairman Koji Konishi as the new agriculture minister. Konishi announced plans to sell 5-kilogram bags of reserve rice at prices exceeding 2,000 yen, with the rice expected to hit the market by early June. The government has already auctioned three batches of reserve rice since March, but the price increases have not been effectively curbed.

The new plan involves injecting 300,000 tons of reserve rice into the market, targeting large retailers with annual sales of at least 10,000 tons. The rice will be sold at 11,556 yen per 60 kilograms, with an estimated retail price of 2,160 yen per 5 kilograms. Retailers can apply through the Ministry of Agriculture, Forestry and Fisheries' official website, and the government will cover the transportation costs, requiring retailers to sell the rice by the end of August.

Konishi has vowed to prevent further price increases, stating that the government may release all 600,000 tons of reserve rice if necessary. As of May 27, approximately 70 companies have applied to purchase reserve rice through a flexible contract, with the total quantity exceeding 200,000 tons. However, analysts remain uncertain about the effectiveness of these measures in lowering overall rice prices, given Japan's annual domestic demand of 670,000 tons and the limited supply of reserve rice.

The root cause of the rice price surge is attributed to Japan's long-standing agricultural policies, which include strict import controls and production suppression measures. The government has been providing subsidies to farmers who switch to other crops to maintain rice prices. Approximately 40% of Japan's rice paddies are subject to production adjustment policies, keeping annual rice production below 700,000 tons. This has led to a situation where the Japan Agricultural Cooperatives (JA) dominate the market, buying 95% of the released reserve rice through bidding, which has hindered the government's efforts to control prices.