Japan's rice production set to surpass demand despite price pressures

Japan's rice production set to surpass demand despite price pressures
/ Pexels - Chen Te
By bno - Tokyo Office October 31, 2024

Japan is poised to produce 6.83mn tonnes of rice in 2024, outpacing the estimated demand of 6.74mn tonnes for the year ending next June, according to the Ministry of Agriculture, Forestry and Fisheries. This forecast is particularly encouraging given the recent supply shortages and price surges attributed to extreme summer heat, which had significantly impacted the previous harvest, as reported by Kyodo News. 

Private-sector rice inventories are also expected to improve, rising to 1.62mn tonnes by the end of June 2025, up from an all-time low of 1.53mn tonnes the year before. This increase in stock could help alleviate some of the pressure caused by recent shortages. However, analysts warn that rice prices may remain elevated, driven by ongoing inflation that keeps production costs for utilities and fertilisers high.

Demand trends indicate a long-term decline, although recent consumption growth can be linked to a slower rate of price increases compared to alternative staples like noodles and bread. Additionally, increased dining out due to a surge in inbound tourism has contributed to this temporary rise in demand.

Looking ahead, the production forecast for 2025 is expected to hold steady at 6.83mn tonnes, but anticipated demand may dip to 6.63mn tonnes, primarily due to the impact of rising prices. Experts have cautioned that the recent uptick in demand could be unsustainable, raising concerns about a potential downturn as consumer behaviour adjusts to the higher costs.

The ministry's analysis also highlighted the rice supply issues experienced over the summer, particularly following an unprecedented advisory from the weather agency regarding the increased risk of a megaquake along the Nankai Trough, which spurred stockpiling behaviour among consumers.

As Japan navigates these complex supply and demand dynamics, the rice market remains a critical focal point, not only for food security but also for its broader economic implications.

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