The results of the rare, meticulously viewed auction in Japan, which ended this week, are about to be released. However, there were no paintings or antique cars in the auction block.
The government is selling 165,000 tonnes of rice from its emergency stockpile to compensate for more than 200,000 tonnes of rice that Japanese news media say has “disappeared.”
But there's more to the story.
Japan doesn't have enough rice, the pillar of food. The shortage has forced supermarkets to implement purchase restrictions and increasing prices, leading restaurants to raise prices for everyday food. Things are becoming so miserable that the government is using emergency stockpiles to lower prices for the first time.
“There's something really unthinkable going on, so we have to get the current extraordinary situation back to normal,” Agriculture Minister Taku Eto told reporters last month, referring to the crisis that ended Wednesday and the three-day auction.
How did this happen?
Last summer, rice began to become scarce in Japan. Experts attribute the confluence of factors, including record summer heat in 2023, and the confluence of factors that hurt the warnings of natural disasters that caused panic purchases last August.
Japan will also strictly limit rice production to maintain prices high and support domestic rice farmers. In other words, minor disruptions in the supply chain can have a disproportionate impact.
The 11-pound bag of rice is currently priced at around 4,000 yen ($27) before doubled. As prices began to rise last year, authorities warned against panic purchases, saying Japan's fall harvest would replenish stocks and lower prices.
Only one of these two predictions came to fruition. Even if the harvest brought in more rice than last year's crop, Japanese distributors were less likely to sell in 2024.
“No one knows,” said Hisanoshima, a professor at Kyoto University's Graduate School of Economics.
But experts both inside and outside the government think they have a pretty good idea.
Growers are giving growers a way to sell rice without going through the traditional major distributors, making it difficult to track rice distribution in Japan, Professor Hino said. In addition to that trend, strict restrictions on rice production means that even minor fluctuations in supply and demand can cause speculative purchases and stockpilings.
Ogawa, an assistant professor of agricultural economics at Utznomiya University, believes prices will continue to rise, so speculators are likely currently hoarding rice.
“Some companies and individuals have begun treating rice as a money game,” he said.
Is this auction helpful?
We'll know in the coming weeks and months.
The government's decision to sell a portion of its strategic rice reserves at auctions was historic. In the past, stockpiles were reserved to replenish supplies in the event of natural disasters or crop failures. This is the first time it has been used to address distribution problems.
The government was released to secure 231,000 tonnes in line with the national shortage. That number represents more than five-fifths of Japan's emergency stockpile in over 300 locations.
The distributor bids on the first 165,000 tonnes at the auction, with the results announced on Friday, showing how many tonnes it is for sale. The government says it hopes that rice will start flowing to wholesalers and supermarkets, and that the remaining 66,000 tonnes will be auctioned later if necessary.
Countries Running on Rice – The average Japanese consumed about 110 pounds of rice per year in 2022 compared to the average American's 27 pounds a year, but the uncertainty about the supply of rice is unstable.
“Rice is an integral part of Japanese people's lives,” said Takagi, 62, from his restaurant in Tokyo. “I think Japanese people are worried right now, as they are concerned about whether rice is available.”
Ikemoto sells rice raw in bags and cooks it in rice ball form with pickles, salmon and other stuffings. Last month he was forced to raise the price of his $1 rice ball by about 20% to keep up with the rising prices of their main ingredients.
Now he's worried. His first ever work in the store in 30 years is about whether he can source enough rice to last until the next harvest. One of his suppliers told him in January that they had already used up rice that year.
“This is the first time I've felt this feeling of anxiety,” he said.
