The results of a rare, closely watched auction in Japan that ended this week are about to be released. But there were no paintings or antique cars on the auction block. The government is selling 165,000 tons of rice — equivalent to roughly two billion bowls — from its emergency stockpile to make up for over 200,000 tons that some Japanese news media say have “disappeared.” Japan doesn’t have enough rice, a pillar of its diet. A shortage forced supermarkets to implement buying limits, and soaring prices have driven restaurants to hike prices of everyday food. Things have gotten so dire that, for the first time, the government is tapping its emergency stockpile in an effort to drive down prices. “Something truly unthinkable is happening, so we must return the current abnormal situation to normal,” Taku Eto, the agriculture minister, told reporters last month, referring to the crisis and the three-day auction that ended on Wednesday. Rice started to become scarce in Japan last summer. Experts have attributed that to a confluence of factors, including record summer heat in 2023 that hurt the harvest and natural disaster warnings last August that sparked panic buying. Japan also strictly limits rice production in order to keep prices high and support domestic rice growers, meaning minor disruptions to the supply chain can have disproportionately large impacts. An 11-pound bag of rice now costs nearly 4,000 yen ($27), double the price a year earlier. As prices began to rise last year, the authorities warned against panic buying, saying that Japan’s fall harvest would replenish stocks and reduce prices. Only one of those two predictions came true. Even though the harvest brought in more rice than the previous year’s crop, Japan’s distributors had less to sell in 2024. Nobody knows, but experts inside and outside the government think they have a pretty good idea. It has become harder to track rice distribution in Japan because policy changes have given growers more ways to sell rice without going through the traditional major distributors, Professor Hisano said. That trend, plus strict limits on rice production, means that even slight fluctuations in supply and demand can trigger speculative buying and stockpiling. Speculators are likely now hoarding rice because they think prices will keep rising, said Masayuki Ogawa, an assistant professor of agricultural economics at Utsunomiya University. Some businesses and individuals have started to deal in rice as a money game, he said. Will this auction help? We’ll find out in the coming weeks and months.
Source link
