Japan Faces 98% Surge In Rice Prices Amid Shortages And Policy Backlash

Japanese rice prices surged by 98 percent in the past year, according to inflation data released Friday.

Experts attribute the sharp increase mainly to a shortage of rice, a staple deeply rooted in Japanese culture.

Several factors contributed to this shortage: a record hot summer in 2023 damaged harvests, and demand surged in 2024, partly driven by panic buying after a massive earthquake warning that never happened.

An influx of tourists craving sushi and rice-based dishes, along with alleged hoarding by some distributors, further strained supply.

For years, declining rice consumption has led the government to reduce land dedicated to rice farming in favor of other crops.

Japan’s aging farmer population also plays a role — nearly 90 percent of rice farmers are over 60, and 70 percent have no successor lined up.

The land used for rice paddies shrank from a peak of 3.4 million hectares in 1961 to 2.3 million hectares in 2024.

This combination of shrinking farmland, aging farmers, and unexpected demand spikes has created a challenging situation for Japan’s rice market and government.

“The Japanese authorities have long focused on how to reduce the scale of rice production in the name of market control, and they haven’t focused on how to increase rice consumption,” said Tadao Koike, the third-generation master of a Tokyo rice retailer dating back over 90 years.

“Now we are all dealing with the payback,” Koike told AFP.

In February, the Japanese government began auctioning some of its emergency rice reserves—an unprecedented move since these reserves were established in 1995, as previous releases were typically reserved for disaster relief. This time, the auctions were driven by supply chain problems caused by the shortage.

However, the latest data show that this measure has had little effect on curbing the soaring rice prices so far.

Masayuki Ogawa, assistant professor at Utsunomiya University, explained that the reserve rice is mainly used for “blended rice” products rather than the more sought-after branded regional or specialty varieties, which limits its impact on the market and consumer demand.

“In terms of average prices, the price of brand-name rice has risen enough to offset the effect of stockpiled rice pushing down the average price, making it difficult for retail prices in supermarkets to fall even when stockpiled rice is released,” Ogawa told AFP.

After years of stagnant or falling prices, inflation is now putting real pressure on Japanese consumers, which in turn is affecting support for the government.

The ruling Liberal Democratic Party (LDP), which has been in power almost continuously for decades, lost its majority last year and has since had to form a coalition government.

Recently, public anger flared after the farm minister, Taku Eto, made controversial remarks about accessing rice supplies. At an event, Eto said he “never bought rice myself because my supporters donate so much to me.” The comments sparked outrage, leading to his resignation.

This incident is likely to deepen voters’ perception that the LDP is out of touch, especially as the party prepares for upper house elections scheduled for July.

Still, Marcel Thieliant, at Capital Economics, said “weekly rice prices are showing signs of stabilisation so rice inflation should start to soften again before long”.