Japan's largest rice scarcity in years is exacerbated by sushi-hungry vacationers, climate

Sushi, onigiri and yakitori don — Japanese rice is a key staple in a lot of its iconic dishes, however the nation is dealing with its largest shortfall in many years. 

Japan has been contending with a rice scarcity in latest months on account of a mixture of dangerous climate and a rise in vacationers, undergirded by the nation’s restrictive rice insurance policies.

“All through summer season 2024, Japan has been grappling with a desk rice scarcity leading to empty grocery store as demand outpaced manufacturing for the final three years inflicting shares to deplete to their lowest ranges in over 20 years,” the U.S. Department of Agriculture wrote in a report printed final week. Shoppers additionally stockpiled extra rice in preparation for Japan’s hurricane season and a significant earthquake warning, the USDA added. 

In August, supermarkets reportedly often ran out of white rice and shops restricted purchases to 1 bag per particular person. Local media NHK partly attributed the scarcity to an inflow in vacationers pushing up demand for sushi and different rice-based dishes. Costs of rice hit 16,133 yen ($112.67) per 60kg in August, rising 3% from the earlier month and 5% larger because the begin of the 12 months.

Japan’s private inventories of rice stood at 1.56 million tons for June, marking the bottom in years, in keeping with knowledge from the Ministry of Agriculture, Forestry and Fisheries. On high of Japanese getting ready for potential pure disasters, the MFAA additionally attributed the rise in desk rice demand to an inflow of vacationers driving up meals service demand.

It’s estimated that rice consumption by vacationers elevated from 19,000 tons between July 2022 and June 2023, to 51,000 tons from July 2023 by means of June 2024, stated Oscar Tjakra, senior analyst at international meals and agriculture financial institution Rabobank.

Whereas vacationer consumption greater than doubled, it is nonetheless comparatively small in comparison with Japan’s annual home rice consumption of over 7 million tons, Tjakra famous.

Japan acquired a record 17.8 million visitors within the first half of the 12 months, well above pre-pandemic levels. That development continues to be going with 3.3 million inbound tourists in July, the very best ever recorded in keeping with Japan’s tourism statistics.

Desk rice manufacturing in Japan has additionally been falling as ageing rice farmers retire and fewer younger folks take up the occupation, stated Tjakra. A sequence of heatwaves and drought within the second half of final 12 months additionally compromised harvests, the analyst elaborated.

Whereas smaller rice harvests and foreigners’ urge for food for sushi play an element, the nation’s rice insurance policies stay the important thing underlying issue contributing to the autumn in general provide, stated Joseph Glauber, senior analysis fellow on the Worldwide Meals Coverage Analysis Institute.

“The Japan rice economic system stays largely remoted from the world market,” Glauber informed CNBC.

Japan imposes a 778% tariff on imported rice to be able to protect its rice farmers. Whereas Japan is dedicated to import a minimal of round 682,000 tons of rice a 12 months below obligations to the World Commerce Group, the rice is basically remoted from Japanese customers and used largely for processing and feed. 

Rice exports from Japan have additionally jumped sixfold from 2014 to 2022 to just about 30,000 tons, Rabobank’s Tjakra noticed.

Increased rice costs pushed Japan’s headline inflation larger in August, rising 2.8% year-on-year on the again of upper vitality and meals prices. Rice and chocolate costs had been among the many largest drivers within the meals basket.