Over 200,000 Tons of Private Contract Applications in Two Days
Differences Emerge Within LDP Over Potential Rice Imports
As the Japanese government releases so-called "half-price reserve rice" through private contracts in an effort to control rice prices, a surge in orders from retailers has led to a suspension of order intake.
According to Yomiuri Shimbun and Kyodo News on May 28, Minister of Agriculture, Forestry and Fisheries Shinjiro Koizumi stated the previous night that approximately 70 businesses had expressed their intention to purchase a total of more than 200,000 tons of government reserve rice through private contracts.
Previously, on May 26, the Japanese government announced that it would sell 200,000 tons of 2022 reserve rice and 100,000 tons of 2021 reserve rice at half the price of the existing auction sale price through private contracts. Due to the flood of orders, the government stopped accepting applications after just one day.
The companies that applied for private contracts include major supermarket chains such as Aeon and Ito-Yokado, convenience store operator FamilyMart, and online marketplace operator Rakuten Group. Most of the businesses that applied to purchase reserve rice this time reportedly hoped to buy the 2022 crop.
The Japanese government plans to begin delivering reserve rice to some businesses starting May 29, aiming to make it available for consumers to purchase by early next month.
The Ministry of Agriculture, Forestry and Fisheries plans to begin accepting private contract applications for 2021 reserve rice from small and medium-sized retailers as early as May 30. For the 2021 reserve rice, the government set a target retail price, excluding tax, at 1,800 yen (about 17,131 won) per 5 kilograms. This is lower than the 2022 reserve rice price of 2,000 yen, reflecting the lower demand for the 2021 crop.
Minister Koizumi, who is leading an all-out effort to control rice prices, has indicated that, aside from the 300,000 tons of reserve rice to be sold through private contracts this time, the government is prepared to release the remaining 300,000 tons of reserve rice as well.
Yomiuri Shimbun pointed out that in order to ensure a smooth supply of half-price reserve rice, the milling of the reserve rice, which is currently stored as brown rice, must proceed smoothly. The Japanese government keeps reserve rice in brown rice form, which is suitable for long-term storage. Many retailers are unable to mill the rice themselves and must rely on specialized companies. However, these companies are already processing previously released reserve rice, so there may be delays in milling the half-price reserve rice.
Rice prices in Japan have been rising since last summer. During the week of May 12-18, the average price of 5 kilograms of rice sold in supermarkets reached 4,285 yen, the highest since related statistics have been compiled. Although importing rice has been discussed as an option to address soaring prices, some lawmakers, including ruling Liberal Democratic Party Secretary-General Hiroshi Moriyama, have effectively expressed opposition to the idea.
Mainichi Shimbun reported that while Prime Minister Shigeru Ishiba and Minister Koizumi are relatively open to rice imports, there are differences of opinion within the party. Figures such as Secretary-General Moriyama and other so-called "agriculture, forestry, and fisheries faction" members regard rice as a protected sector and resist imports. With the Upper House election approaching this summer, the newspaper predicted that it will not be easy to increase rice import volumes.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
