Thursday, April 24, 2025

Japan’s Rice Demand Soars for the First Time in a Decade – What’s Behind the Surge?

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The demand for rice in Japan has increased for the first time in a decade.

According to Kyodo News and the Nihon Keizai Shimbun, Japan’s Ministry of Agriculture, Forestry and Fisheries announced that the demand for rice for consumption (excluding processed rice) from July 2023 to June 2024 is expected to be 7.02 million tons, an increase of 110,000 tons (1.6%) compared to the same period last year.

This marks Japan’s first increase in rice demand from July 2013 to June 2014.

Annual rice demand decline offset by 30,000-ton consumption by foreign tourists

Japan’s demand for rice has been on a downward trend, declining by approximately 10 tons annually, mainly due to a shrinking population. However, this year marked a significant uptick, the highest in a decade, spurred by a unique combination of factors.

The Ministry of Agriculture, Forestry and Fisheries of Japan notes that a slower price increase for rice than alternatives like noodles and bread contributed to this rise. Additionally, an influx of foreign tourists, who have been consuming more rice, played a critical role—with the first half of the year seeing a record 17.78 million foreign visitors—surpassing the pre-pandemic peak of 16.63 million in 2019—the impact on rice consumption was notable, estimated at 30,000 tons.

This surge in demand has led to the depletion of rice stocks to their lowest levels since records began in 1999. By the end of June, private stock levels had fallen to around 1.56 million tons, marking a 21% decrease from the previous year. This scarcity has pushed the average wholesale price for 60 kg of rice from the 2023 crop to $102, the highest since 2019.

Compounding the issue, the recent spell of unusually high temperatures has affected the quality of rice. First-grade quality percentages in popular varieties like Koshihikari have fallen, creating supply challenges for high-quality rice. In response, some stores have begun to limit the quantities of rice available for purchase, reflecting the strain on supply amidst growing demand.

Japanese government: “No urgent supply-demand issues… temporary phenomenon”

The Japanese government maintains a reassuring stance despite concerns about rice supply due to increased demand and low stock levels.

During a regular press briefing, government spokesperson Yoshimasa Hayashi clarified the state of rice reserves. “As of the end of June, our stockpiles constitute about 22% of our annual demand, aligning closely with levels recorded in 2011 and 2012,” he explained. “We do not view the current situation as critical.”

Looking forward, the government anticipates that the recent surge in rice demand will not persist. According to projections from the Ministry of Agriculture, Forestry, and Fisheries, rice demand for the fiscal year from July 2024 to June 2025 is expected to decline by 290,000 tons, settling at 6.73 million tons. This forecast suggests a return to the declining trend in rice consumption, attributed to factors such as Japan’s decreasing population.

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