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Yomiuri Shimbun
27-05-2025
- Business
- Yomiuri Shimbun
19 Firms Apply to Buy 90,000 Tons of Japan Government Rice; Could Appear on Store Shelves by First Week of June
The Yomiuri Shimbun Agriculture, Forestry and Fisheries Minister Shinjiro Koizumi speaks at the House of Councillors Agriculture, Forestry and Fisheries Committee on Tuesday. The Agriculture, Forestry and Fisheries Ministry had received applications from 19 companies to buy state-held reserves of rice through 'discretionary contracts' as of 9 a.m. Tuesday, agriculture minister Shinjiro Koizumi told reporters Tuesday after a Cabinet meeting. The total amount applied for was 90,824 tons, part of the 300,000 tons to be released through the contracts in which the government will set the price of the grain. Once the deals are closed, the rice is expected to be delivered to the companies on Thursday at the earliest. If all goes well, it could appear on store shelves by the first week of June. The applicants include Pan Pacific International Holdings Corp. — a leading retailer that operates Don Quijote discount stores — Sundrug Co., Rakuten Group, Inc. and OK Corp, the ministry said. Major retailers handling at least 10,000 tons of rice annually are currently eligible for the contracts. Koizumi has considered expanding the scope of applicants to small and medium-sized supermarkets and local rice shops, saying, 'The next step is to determine how to deliver the rice to these places satisfactorily.' The ministry will consider revising the details of the contracts in the future, Koizumi said. By shifting from public bidding to discretionary contracts, the ministry aims to deliver the rice directly to retailers that are close to consumers and have it available at supermarkets and other stores for around ¥2,000 per 5 kilograms (excluding tax) by early June. 'We will do our utmost to alleviate the public's concerns and prevent further decline in rice consumption.' Koizumi said Tuesday during a policy speech at the House of Councillors Agriculture, Forestry and Fisheries Committee.
Yomiuri Shimbun
27-05-2025
- Business
- Yomiuri Shimbun
Discretionary Contracts for Stockpiled Rice: Will They Be A Catalyst for Calming Prices?
The government has taken the unusual step of releasing stockpiled rice under 'discretionary contracts.' It is hoped that this will have the effect of turning the tide on soaring rice prices. Under the conventional practice of general competitive bidding, eligible participants were limited to major distributors, such as the National Federation of Agricultural Cooperative Associations (Zen-Noh). In contrast, the discretionary contracts will allow around 50 major retailers that can handle 10,000 tons or more of rice to participate. According to an announcement by the Agriculture, Forestry and Fisheries Ministry, it will release a total of 300,000 tons of stockpiled rice — 200,000 tons produced in 2022 and 100,000 tons produced in 2021. The sales price at stores, including general expenses and profit margins, is envisioned to be around ¥2,000 per 5 kilograms. The rice is expected to be on store shelves in early June. Rice has been stockpiled with the use of national funds, and the ideal approach is to sell the rice at the highest possible price when it is released. Under general competitive bidding, the operator who offers the highest price wins the bid. For this reason, over-the-counter prices for 5 kilograms of rice have remained high at more than ¥4,000, double the level last year, even though 310,000 tons of stockpiled rice have been released so far. The release of stockpiled rice under discretionary contracts is reportedly meant to be a catalyst to change the uneasy sentiment in the market. However, the government's attempt to tie down over-the-counter selling prices poses a challenge in terms of the antitrust law. Retailers are urged to exercise restraint and avoid adding excessive profit margins to their selling prices. Prime Minister Shigeru Ishiba said at the Diet that prices 'must be in the ¥3,000 range.' In addition to stockpiled rice, the prices of brand-name rice will also be a focus. The ministry has noted that stagnation at the distribution stage is the reason for the high prices. If stockpiled rice that is priced cheaply due to the discretionary contracts is placed on store shelves, wholesalers and other businesses — who are said to be hoarding their inventory in anticipation of continued tight supply and demand — may increase their sales, and the effect of lower prices may spread to brand-name rice as well. Even if stockpiled rice is used for the time being as a step to calm prices, it will be necessary to change the nation's rice agricultural policy from the consumers' perspective as a step in the medium to long term. This is because the current policy of effectively reducing rice paddy acreage has highlighted an inability to provide a stable supply of rice under unforeseen circumstances. It is obvious that current rice prices are at a level that is difficult for consumers to accept, but producers are also faced with rising prices of fertilizers and production materials. The number of rice farmers has halved over the past 15 years. There are concerns that if prices become too low, farmers will leave the business at an accelerated pace. It is hoped that a system will be established that allows farmers to increase rice production with peace of mind, including strengthening the production base by reviewing the policy of reducing rice paddy acreage, and transferring surpluses to exports. It is important to promote measures to stabilize prices that will be acceptable to both consumers and producers. (From The Yomiuri Shimbun, May 27, 2025)
Yomiuri Shimbun
22-05-2025
- Business
- Yomiuri Shimbun
Koizumi, Japan's New Agriculture Minister, Faces Soaring Rice Prices and Possible Surge in Imports from U.S.
The Yomiuri Shimbun Agriculture minister Shinjiro Koizumi arrives at the Prime Minister's Office in Tokyo on Wednesday. Newly appointed agriculture minister Shinjiro Koizumi faces critical challenges, including addressing the rising price of rice and a possible increase in agricultural imports from the United States. How he manages these issues could ultimately determine the fate of Prime Minister Shigeru Ishiba's administration. During his inaugural press conference at the Agriculture, Forestry and Fisheries Ministry on Wednesday, Koizumi said: 'What we need to focus on right now, above all, is rice. It's all about tice. I want to take the first step toward lowering rice prices.' Ishiba said Wednesday he had instructed Koizumi to change how the government sells stockpiled rice reserved for emergency use, shifting from competitive bidding to discretionary contracts in order to reduce prices. Although currently only rice distributors can bid on contracts, Koizumi stressed that he was committed to moving quickly to flesh out plans such as for expanding discretionary contracts to include retailers and restaurant operators. The National Federation of Agricultural Cooperative Associations (JA Zen-Noh) placed successful bids on more than 90% of the 210,000 tons of stockpiled rice released by the ministry in March. Yet, as of April 27, only about 10% of that rice had reached retailers and the food service sector. The average price of a five-kilogram bag of rice sold at supermarkets nationwide has increased for 17 weeks running, and now exceeds ¥4,000 — double last year's price. Koizumi will have to act swiftly to ensure that reserve rice reaches consumers and retail prices come down. He will also be tested during the Japan-U.S. negotiations over President Donald Trump's tariff measures. Proposals for increased imports of corn and soybeans, both of which Japan relies on imports for, are being considered as bargaining chips with the United States. Plans to boost rice imports are also being floated, though they are certain to face fierce resistance from Japan's farmers. 'Based on a policy of not sacrificing agriculture, I want to cooperate with relevant ministries and agencies to secure national interests,' Koizumi said. One senior official inside the ministry expressed optimism, saying, 'We expect he will make reforms.' However, another senior official raised concerns, arguing that 'if policies are decided top-down, it will cause confusion on the ground.' A Diet member with close ties to the agricultural lobby said that Koizumi 'knows how to grab attention, but his leadership abilities are still untested.'
