In an effort to stop consumers from switching to less expensive, international brands, Japan’s new agricultural minister promised on Friday to swiftly transfer rice from government warehouses to store shelves where it would be sold for far less than it is now.

With upper house elections scheduled for July, rising rice prices, partly due to crop damage from intense heat and additional demand from a surge in tourism, have become a major issue for both the government and Japanese consumers.

Since March, the government has been releasing some of its stockpiled rice, which has not resulted in lower supermarket prices.

“The abnormal price surge that we’re seeing now could accelerate the shift away from domestically produced rice in Japan,” Shinjiro Koizumi told a press conference.

“We’re already seeing supermarkets buying directly from the United States despite having to pay tariffs… We have to quash this abnormal situation, and speed is of the essence.”

Japan has historically been reluctant to encourage rice imports. It seeks self-sufficiency for its basic food and imposes high tariffs to protect local farmers from competition.

Koizumi, the son of former prime minister Junichiro Koizumi, took up his post just two days ago. His predecessor, Taku Eto, was forced to resign after angering voters by saying he had never had to buy rice thanks to gifts from supporters.

Koizumi said he aimed for stockpiled rice to reach store shelves for under 3,000 yen ($21) per 5 kg by early June. That compares with an average price of 4,268 yen from May 7 to May 11, double the same period a year earlier.

Nationwide consumer price index (CPI) data on Friday showed soaring rice prices accelerating overall food inflation to 7.0% in April, from 6.2% in March.

Koizumi also met with Rakuten Group (4755.T) CEO Hiroshi Mikitani, who said the online retail giant was prepared to support the government’s efforts.

When he took office, Koizumi announced that the government would sell emergency-use rice through discretionary contracts rather than an auction.

Due to a convoluted and time-consuming distribution and processing plan, only roughly 7% of the 210,000 metric tonnes of rice the government released from its emergency reserve in March had reached shops.

Source: Reuters

Image Credit: Capital News