Japan to Release Rice Reserves To Curb Price Increases

Rising rice prices in Japan have prompted the agriculture ministry to authorize disbursements from the country's million-ton rice reserve to help stabilize costs.

To address soaring rice prices, the government will release some of the country’s rice reserves and amend regulations to allow withdrawals.

Officials have reassured rice farmers that these disbursements will not cause a drastic price drop, Marco Quiroz-Gutierrez reported for Fortune.

Similar to the U.S. Strategic Petroleum Reserve, Japan stockpiles up to 1 million tons of rice—equivalent to the weight of 5,000 blue whales—representing about one-seventh of the country's estimated annual consumption, according to Bloomberg.

Unlike the U.S. petroleum reserve, however, Japan's rice stockpile is primarily maintained for emergencies, such as natural disasters or crop failures.

The last time Japan tapped into the reserve was in 2011, following the Tōhoku earthquake and the subsequent tsunami, which triggered a meltdown at the Fukushima nuclear power plant, The Financial Times (FT) reported.

Rice prices in Japan surged by 60% last month, according to Bloomberg, contributing to rising core inflation. The price spike was exacerbated last summer when consumers rushed to stockpile rice due to fears of a megaquake off the Pacific coast.

A combination of supply shortages, rising production costs, and increased demand from tourism-driven restaurants and hotels has strained the rice market.

Additionally, Japan's central bank raised interest rates last month to their highest level in 17 years in an effort to combat persistent inflation.

To address soaring rice prices, Japan’s Minister of Agriculture, Taku Eto, announced last week that the government would release some of the country’s rice reserves and amend regulations to allow withdrawals “when the smooth distribution of staple rice is hindered and when the ministry deems it necessary,” FT reported.

Higher rice prices have primarily benefited Japanese farmers, who are key supporters of the ruling Liberal Democratic Party, which has held power for most of the time since 1955, according to Asahi Shimbun.