The Ministry of Agriculture, Forestry and Fisheries on Dec. 16 resumed the tender of imported rice through the so-called SBS (simultaneous buying and selling) system, which has been suspended due to the murky rebate payment practice involved, for the first time in about three months. Rice importers and wholesalers auctioned imported rice under a new rule, which bans rebates. Demand for rice for commercial use turned stronger than the industry had initially expected, as cheaper domestic rice was in short supply. The amount of rice auctioned through the SBS hit a new high for the first time in two years and ten months.
Of the scheduled amount of 30,000 tons of rice, 11,384 tons were successfully auctioned. The bid ratio rose 3 points to 38% compared to the previous tender held in September.
The average bid price fell slightly. For example, general rice sold at 172 yen per kilogram (weighted average), 10 yen cheaper than in the previous tender. This was because a drop was anticipated in wholesale prices for domestic rice due to a rich harvest. On top of this, the view that the price of imported rice may drop thanks to the prohibition of rebates also played a role.
In usual years, the SBS rice remains unsold. But the current fiscal year sees demand growing stronger for the first time in some years. MAFF plans to sell 100,000 tons of rice under the SBS tender a year. SBS tenders will likely be held more frequently after the turn of the year. (Abridged)