THE ASAHI SHIMBUN

At what price rice?

Apparently, the sky’s the limit.

Hoarding and speculative trading, coupled with government tardiness, seem to be the primary factors behind the crisis.

The government blames the situation on speculative reluctance to sell.

But even with its own decision to release stockpiled rice, there is no sign that prices have begun to fall.

The government’s handling of the issue is a matter of growing criticism and concern.

Rice prices have been high since last summer, after an advisory warning of a potential Nankai Trough megaquake triggered panic buying among the public.

Initially, the farm ministry assumed that rice prices would fall once the new rice crop was released in the fall.

But that did not happen, which is when the finger-pointing began in earnest.

The ministry then changed its explanation, contending that soaring rice prices were caused by a “reluctance to sell” due to unexpected market speculation.

The ministry expects the 2024 rice harvest to total 6.79 million tons, 180,000 tons more than the previous year.

However, the volume of new rice secured by major rice dealers was less than the previous year.

At the end of 2024, it was 210,000 tons less, and at the end of January this year, it was 230,000 tons less.

The ministry attributes this difference to speculative buying of new rice by small and midsize traders and a reluctance on the part of farmers to sell.

MARKET SPECULATION

Shoichi Fujihira, 74, president of Nittano Farm, an agricultural corporation in Isumi, Chiba Prefecture, noticed something unusual last fall.

He said construction companies and people identifying themselves “rice traders” drove up in trucks and bought up all the new rice.

One individual seemed to be there with the intention of reselling the rice at a much higher price.

Fujihira checked a website that apparently was operated by this person. The website was offering to sell the rice for about 700 yen ($4.65) more than the farm price.

Since the scale on which “reselling” transactions such as these is not known, it is uncertain whether they can be considered as the “main culprit” in the rise in rice prices.

Once it decided to release the stockpiled rice, the ministry hoped speculators would rush to sell off their inventories and rice prices would start to subside.

But even after the ministry decided to release its stockpiled rice on Feb. 7, prices did not drop.

An official of the Ishiba administration wondered “if the cause of the sharp rise in prices is not speculation, but simply a shortage of rice.”

Some experts believe the ministry may have overestimated the production volume for the 2024 crop year.

Many farmers have said the crop condition index, upon which the estimates are based, is “higher than the reality,” and the harvest could be lower than expected.

It is also possible that consumers, restaurants, distributors and others are trying to hold larger inventories in preparation for a repeat of last summer’s rice shortage.

If the entire population were to try to hold two weeks’ worth of “inventory,” simple calculations indicate a demand of about 300,000 tons.

This is larger than the government’s planned release of stockpiled rice, which is 210,000 tons.

“Fundamentally, there is not enough rice,” said a Tokyo supermarket executive. “Releasing the stockpiled rice is like watering a desert, and the price of rice may not go down.”

(This article was written by Hirobumi Ohinata, Jin Hirakawa, Eiji Zakoda and Sho Ito.)

Published Date: March 1, 2025