Japan Rice Trade Anticipates Higher Domestic Prices for Coming Marketing Year

Aug 23, 2016
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TOKYO, JAPAN -- USA Rice staff are traveling in Japan this week and met with members of the Japanese rice trade where they discussed several factors in play that are likely to strengthen Japanese domestic rice prices this next crop year.

First is the Japanese government's increasing diversion of rice production to animal feed which will impact reasonably-priced rice for foodservice use.  Additionally, the Japanese press reported last week that JA, the large national agricultural cooperative, will increase their prices to purchase rice from growers.  For instance, the price of Niigata Koshihikari will be 13,600 yen per 60kg (approximately $102/cwt brown basis), which is an increase of six percent compared to the previous year. 

A second factor portending higher prices is the reported decrease in this year's domestic table rice production, forecast to be 7.35 million tons - 90,000 tons less than 2015.

A third factor that could drive prices higher in Japan is weather.  Late summer and fall is typhoon season in the western Pacific.  As of July, the 2016 Japanese crop looks to be average in size, but the shortage of foodservice rice could be worsened by any adverse weather before harvest this fall. 

"Higher domestic prices make imported U.S. rice more attractive to Japanese end-users," said USA Rice Vice President of International Promotion Jim Guinn.  "And since the foodservice industry is a primary user of U.S. rice that comes into Japan through the Simultaneous-Buy-Sell (SBS) system each year, importers are watching the rice market carefully as the FY2016 SBS tender process begins soon."