Faced with soaring prices, Japan is experiencing the largest surge in rice price inflation since Tokyo’s bubble burst. The retail price of rice in stores is nearing an all-time high. Consumer advocates and market analysts alike are sounding the alarm over this jump. Simultaneously, Japan is witnessing a record increase in rice imports this year.
The increase in average rice prices is mostly due to the rising price of homegrown rice types. Japan’s imports of cheaper foreign rice have increased. When it comes to retail markets, restaurants are more likely to use these products than other types of retail markets. As a result, the effect of affordable imported rice is ultimately negligible at the grocery store shelf price that consumers pay.
Despite the increasing volume of imported rice sold in Japan, consumers there still show a strong preference for domestic rice. Local varieties have intense loyalty, which allows their prices to remain high. This causes domestic rice to be more expensive than imported rice. This year’s record rice harvest is just beginning to reach supermarket shelves. Eating consumers are gravitating toward pricier domestic varieties, which is further pushing average prices upward.
It is never enough to remove the market dynamics. While imported rice can be significantly cheaper, Filipinos still want local products, so in the market at the retail level their prices remain elevated. Consequently, despite the uptick in imports, the average price of rice has not dropped as expected. Rather, the total expense continues to be sky-high thanks to demand for domestic rice remaining high.
So as Japan’s consumers adjust to the new market environment, they will have to cope with buying relatively expensive domestic rice varieties. Combined with skyrocketing production costs, it has increasingly become harder to find affordable alternatives. To complicate matters, there is an equally strong commitment to local preferences.