Japanese rice traders expect prices to drop over next 3 months
Marking a record fall of 24 points, the index gauging the price outlook slid below 50, meaning more respondents believe prices will decline than expect rises, last month, the Rice Stable Supply Support Organization said. It was the index's first fall below the line since April 2022.
Published for the first time since the government decided in late May to release its stockpiled rice through direct contracts with retailers, the index stood at 35 in June -- the lowest since September 2021, during the COVID-19 pandemic.
But while the outcome boosts expectations that rice prices will become more reasonable in retail stores, it remains uncertain whether they will continue to decrease given that extreme heat in Japan could hamper this year's harvest, some analysts say.
The most significant factor in the decision by the traders was "national policy," cited by 49 percent, as government stockpiled rice began hitting store shelves in late May under the initiative of Shinjiro Koizumi, who became farm minister that month.
Other factors cited were the "procurement situation of rice" at 26 percent, "domestic inventory level" at 18 percent, and "consumer trends" at 5 percent, according to the survey targeting 139 vendors and groups, conducted over about a week from June 19.
The price of 5 kilograms of rice stood at 3,920 yen ($27) in mid-June, entering the 3,000-yen range for the first time in three and a half months, the government said. The price of stockpiled rice has hovered around 2,000 yen for the same amount.
The surge in rice prices started last year, straining households already burdened by inflation outpacing wage growth. In May, rice prices set a fresh record for the eighth straight month, rising 101.7 percent from a year earlier, official data showed.
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