Oct. 2 (Bloomberg) -- Japan, Asia’s largest wheat importer, will change the price calculation method for the grain sold to domestic flour millers this year as the government moves to reduce purchasing costs and risk.

The government has reviewed selling prices of imported milling wheat twice a year, based on average buying costs over eight months. It will shorten the period to six months to better reflect international market fluctuations, the Ministry of Agriculture, Forestry and Fisheries said today in a statement.

The new method will be applied to the next price change. Selling prices of imported wheat dropped by 14.8 percent on average in April, the first cut in three years, after import costs fell on a higher yen and a slump in overseas markets.

The ministry, which controls overseas purchases and domestic sales of wheat, will also increase the volume it imports under the so-called simultaneous buy and sell system, the statement said.

About 6 percent of Japan’s food wheat imports last fiscal year were through the SBS system, which allows purchases from countries other than Australia, Canada and the U.S., the world’s biggest shipper of the grain. The change could increase chances for exporters such as Russia, France and Argentina to sell to Japan, which buys almost 90 percent of its wheat overseas.

The SBS system for purchases of food wheat and barley started in April 2007 to loosen the government’s grip on imports. Under the system, Japanese food makers and trading companies jointly bid for the grains of any origin and quality sought.

Separately, the ministry holds tenders almost every week to buy specific types of wheat exclusively from the U.S., Canada and Australia for sale to domestic flour millers.

The ministry bought 3.91 million tons of milling wheat through regular tenders in the year ended March 31. It purchased 258,754 tons of food wheat under the SBS system last fiscal year.

To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net

Last Updated: October 1, 2009 20:39 EDT