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ECONOMY > Agriculture

Price gap between Japanese and American rice narrowing

  • November 6, 2021
  • , Nikkei , p. 24
  • JMH Translation

By Ogawa Nozomu


The price gap between Japanese and American rice has narrowed. In the government bidding conducted in late September, medium-grain, polished uruchi rice from the U.S. sold at a price 40% higher than the price quoted in the same month a year ago. On the contrary, the wholesale price of Japanese rice of crop year 2021 has been on the decline. Japanese restaurants are eying a switch to Japanese rice to save on the cost of ingredients. 


For polished rice, the price gap between Japanese and U.S. rice has been around 5 yen per kilogram, compared with about 122 yen in October 2018.


The price of U.S. rice has risen sharply. The wholesale price of U.S. rice that the government set through simultaneous buy and sell, or SBS, transactions was about 240 yen per kilogram in late September, hitting a higher range for the first time in about four years. The price increase was caused by a 20% output reduction in California, a key rice-growing region in the U.S., due to droughts, high freight rates and a strong dollar against the yen.


“Calrose,” a California-grown medium-grain variety, makes up the bulk of U.S. rice shipments to Japan and is mainly used in restaurants. Japan’s Calrose imports represented only 1% of rice consumption by restaurants and producers of ready-to-eat meals in fiscal 2020, but the variety accounts for 60% of Japanese rice imports through SBS transactions.


The price of Calrose has already surpassed that of Japanese rice in some transactions. In October, a rice trading firm in Tokyo offered Calrose of crop year 2020 at 218 yen per kilogram and new Tohoku-grown rice at 200 yen per kilogram in its meeting with a bento producer. The prices offered a year ago were 235 yen for Calrose and 265 yen for Tohoku-grown rice. The bento producer switched to Japanese rice.


Rice wholesalers are beginning to take a wait-and-see approach. In SBS transactions conducted in late October, there was no bidding on Calrose. Bidding takes place several times a year. “As there is a sufficient stockpile of domestic rice, we will carefully decide on the purchase of imported rice,” said a senior executive of a major rice wholesaler.


The price of U.S. rice is expected to stay high. Currently, the phenomenon of “high American rice and cheap domestic rice” is limited to some business transactions, but the trend may spread more broadly. Restaurants, which are on the way to recovery from pandemic-related sales slump, may opt not to buy American rice to save costs. (Abridged)

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