Turmoil in market already impacted by poor harvest drives up costs for restaurants.

JUMPEI KINEFUCHI, YUI SATO and FUMIKA NAKASHIMA, Nikkei staff writers

TOKYO — The price of rice used by restaurants in Japan has surged by 30% to 40% from a year earlier, as food service companies move to secure supplies on expectations of a prolonged shortage caused in part by an influx of tourists.

The JA Group, Japan’s agricultural collective, sets prices that it pays farmers for rice varieties often used by businesses. For one variety often used in rice bowl dishes, this year’s price was set at 15,000 yen ($104) for 60 kilograms, up 39% from last year. The price of another variety popular among restaurants and providers of prepared meals rose 38% to 16,500 yen.

Businesses buy about 40% of the rice on the Japanese market, while the remainder goes to retailers to be purchased by households, according to the Ministry of Agriculture, Forestry and Fisheries. The prices set for household-use varieties rose by 10% to 30% from a year earlier. Historically, prices for business-use rice tend to rise more sharply than those for consumers.

The appetite among businesses to procure rice is stronger than usual. They appear to be placing the highest priority on securing stable supplies amid turmoil in the rice market, triggered by a poor harvest resulting from a heat wave. The situation has been exacerbated by growing demand from tourists visiting Japan.

“A company offered to pay any price as long as it can secure the necessary amount,” said a JA official based in northern Japan.

Large food service companies with deep pockets have been moving to sign medium- to long-term supply contracts with farmers by offering high prices to ensure that they can get their hands on rice regardless of market trends.

Hiday Hidaka, operator of the Hidakaya restaurant chain, secured supplies this month by paying double compared to a year earlier. It plans to sign monthly contracts over the next three months by offering similar prices, with an eye on longer contracts.

Origin Toshu, which runs Origin Bento shops, anticipates even higher prices next fiscal year.

These businesses face the need to hike menu prices to cover the higher cost of rice.

Skylark Holdings raised prices of dishes that use rice on Thursday. At its Gusto family restaurant chain, a plate of white rice costs 230 yen, an increase of 15%.

The higher prices for domestically grown rice have led to stronger demand for cheaper rice grown abroad. An official at a rice wholesaler said that more companies are now using a blend of domestic and foreign rice.

Published Date: September 30, 2024