The Japanese government intends to offload another 200,000 tons of rice from its reserves through direct agreements with retail outlets, as stated by farm minister Shinjiro Koizumi on Tuesday. This step is part of the country's broader strategy to mitigate the high costs associated with rice, which is a staple food in Japan. The released quantities will include 100,000 tons each from the 2020 and 2021 crop years, with Koizumi predicting that the 2020 harvest rice will retail at approximately 1,700 yen (around $12) for 5 kilograms.
Following these releases, Japan's rice reserves are expected to dwindle to about 100,000 tons, a significant reduction from close to 910,000 tons prior to the government initiating its releases through auctions earlier this spring. This notable decrease in stockpiles has sparked worries regarding the sufficiency of governmental rice reserves in case of emergencies, prompting Koizumi to consider boosting rice imports to maintain stable local supplies. The minister noted that the rice would be distributed to a variety of outlets, including smaller supermarket chains and specialty shops, with the ministry set to initiate the application process for retailers starting Wednesday.
Koizumi emphasized a commitment to expedite the delivery of stockpiled rice to ensure that consumers can access it at lower market prices. The Japanese government traditionally maintains a buffer of around 1 million tons of rice in preparation for possible emergencies, replenishing this stockpile annually by purchasing 200,000 tons from farmers over a five-year duration. Japan's rice consumption per year is roughly estimated at 6.7 million tons.
Store shelves in Japan have seen a rice shortage since last summer, contributing to price surges that have led to current averages of 4,223 yen for 5 kilograms, which is double the pricing from the previous year. The ministry has raised suspicions that some wholesalers and farmers are stockpiling rice in anticipation of further price hikes. In response to rising public discontent, the government initiated these stockpile releases earlier in the year, marking the first time reserves have been tapped to mitigate distribution challenges.
Furthermore, Koizumi became the farm minister on May 21, following the resignation of his predecessor over a mishap regarding rice donations from supporters. Under his leadership, the decision was made to release 300,000 tons of rice using the unusual approach of direct sales to retailers, with the hope that the availability of cheaper rice would lower overall pricing in the market. Koizumi reassured the public that the remaining rice reserves are adequate to manage potential disasters or poor harvests, citing that only 40,000 tons were released in the aftermath of the catastrophic 2011 earthquake and tsunami that triggered severe nuclear incidents in northeast Japan.
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