Japanese retailers apply to buy government’s cheap stockpiled rice

By Reuters

Nineteen Japanese companies have applied to purchase the government’s stockpiled rice, with contracts expected to be finalised and rice delivered to them as soon as Thursday, Agriculture Minister Shinjiro Koizumi said on Tuesday.

WHY IT’S IMPORTANT

This is a crucial step in the government’s plan to swiftly alleviate public concerns about rice prices, which have doubled since last year, by making the staple more affordable and readily available.

Rice prices have become a top concern for voters ahead of upper house elections in July.

The applications come less than a week after Koizumi took over as agriculture minister after his predecessor resigned over a gaffe about rice, and immediately overhauled the government’s method of releasing emergency rice.

KEY QUOTE

“We are now proceeding with the procedures promptly, and we will complete the discretionary contract with the first businesses today or tomorrow, and deliver the stockpiled rice the day after tomorrow,” Koizumi said.

“Things are falling into place so that the rice can hit store shelves in the first week of June.”

CONTEXT

Rising rice prices, exacerbated by crop damage and heightened tourism demand in Japan, have become a major issue, causing pain for consumers and denting the government’s popularity.

The government’s previous method of releasing stockpiled rice through auctions and layers of middlemen was deemed too slow and insufficient to lower retail prices.

BY THE NUMBERS

The applications amount to approximately 90,824 metric tons, which is around 30% of the rice planned for release. Among them, Don Quijote operator Pan Pacific International Holdings (7532.T), opens new tab and Sundrug (9989.T), opens new tab have applied for 15,000 tons and 12,866 tons, respectively.

WHAT’S NEXT

All eyes will be on whether the cheaper stockpiled rice, which the government wants to be priced around 2,000 yen ($14.05) per 5 kg before tax, will bring down the price of other rice.

Supermarket rice prices have risen 19 of the last 20 weeks for which data is available, hitting a record high 4,285 yen in the week through May 18. Koizumi has said the government was ready to release more rice if necessary.

($1 = 142.3800 yen)

This article has been republished from The Reuters.