"Signs Since 2021"...Japan's Rice Crisis Foreseen Amid Sharp Production Decline

Gap Between Rice Supply and Demand in Japan Continues to Widen
"Abnormal Weather Disrupts Balance, Even Surplus Is Insufficient"

While there has been no clear diagnosis regarding the skyrocketing rice prices in Japan, it has been revealed that since 2021, domestic rice production has failed to meet demand, signaling potential supply disruptions.

On June 2, the Asahi Shimbun, citing data from the Ministry of Agriculture, Forestry and Fisheries, reported, "Since 2021, rice production has started to fall short of demand, and by 2023, production was 6.61 million tons while demand reached 7.05 million tons, resulting in a widening gap between supply and demand."

Rice is being sold at a supermarket in Miyazaki Prefecture, southwestern Japan. Photo by AP

According to the report, the 2023 rice crop saw an extremely low proportion of normal rice grains due to abnormal summer heat, which hampered rice plant growth.

In addition, when a temporary Nankai Trough Earthquake Advisory (major earthquake warning) was issued in August last year, panic buying of rice was triggered for a period of time, leading to intensified competition among distributors to secure rice. This marked the full-scale onset of the so-called "Reiwa rice panic."

However, in order to prevent the problem of surplus rice caused by changing dietary habits, the Japanese government has, since the 1970s, continued de facto rice production control policies such as fallowing and crop conversion incentives.

The Asahi Shimbun reported, "As of 2020, the number of rice farming households stood at 700,000, down 60% over 20 years. Production was curbed to match the outlook for declining demand, which helped maintain supply-demand balance. However, if this balance is disrupted by abnormal weather, the lack of surplus increases the risk of sharp price hikes."

In response to the current rice crisis, the Japanese government is reportedly reviewing its rice production policies. On May 21, Prime Minister Shigeru Ishiba stated in the National Diet that he "agreed" with opposition lawmakers' calls to shift rice policy toward increased production.

Earlier, in March, the Ministry of Agriculture, Forestry and Fisheries included a plan to increase rice exports in its "Basic Plan for Food, Agriculture and Rural Areas," which is revised every five years. The aim is to utilize surplus rice production capacity to expand exports, but if a domestic supply shortage arises, the export volume would be redirected to the domestic market to prevent price surges and to avoid an excessive reduction in rice cultivation area.