Explaining the reason why the domestic rice market is in shortage but exports are at a record high

Rice stocks in the Japanese market have been steadily declining and are at record lows. In contrast, the country's rice exports from January to July reached a record high of 24,469 tons, up 23% year-on-year.

Empty rice shelves at a supermarket in Yokohama, Japan, August 28. (Source: Stars and Stripes)

On September 3, the Japanese Ministry of Agriculture , Forestry and Fisheries said that in the first 7 months of the year, the highest amount of rice exported, 7,163 tons, was exported to Hong Kong (China).

The United States ranked second with 4,638 tonnes, followed by Singapore with 3,554 tonnes. The total export value also reached the highest level of 6.4 billion yen ($44.14 million), up 29%.

Although private sector rice inventories have fallen to their lowest level since 1999, rice destined for export cannot be used in the domestic market because government subsidies are tied to rice production.

The government sees rice as one of its major exports. Annual export volume in 2023 is expected to be 37,186 tonnes, up about 12-fold from a decade ago.

Domestic demand for rice is falling. As a result, the ministry has limited rice production even after ending the policy in 2018, forcing farmers to reduce rice production. On the other hand, the ministry has encouraged farmers to grow rice for export by paying subsidies. The subsidies are as high as 40,000 yen ($276) per 1,000 square meters of rice fields.

The use of subsidized rice is fixed, so if the rice is used for the domestic market, farmers must pay back the subsidy.

"The private sector's rice stocks as of the end of June were 1.56 million tons, much larger than last year's annual export volume. The shortage of rice in the domestic market will gradually improve," Agriculture, Forestry and Fisheries Minister Tetsushi Sakamoto stressed.

Source: https://baoquocte.vn/nhat-ban-ly-giai-nguyen-nhan-thi-truong-gao-trong-nuoc-thieu-hut-nhung-xuat-khau-lai-cao-ky-luc-284994.html