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Japan Cuts Food-Rice Output Target Next Year as Demand Drops

Japan cut its production target for food rice by 0.3 percent next year from 7.93 million tons in 2012 as domestic demand declines, the agriculture ministry said.

The volume matches the consumption forecast at 7.91 million tons for the 12 months through June 2014, the lowest level in at least 18 years, the ministry said in a report today.

Japan, the world’s largest corn importer, grows enough rice to feed itself as the government maintains high tariffs on imports and pays subsidies to growers. Demand keeps falling as consumer tastes change, and the decline may accelerate as retailers seek alternatives after prices jumped this year.

“Restaurant operators and retailers have started reducing the volume of rice on their menu,” Ryo Kimura, a member of an advisory panel to the agriculture minister, said today at a meeting that approved the production plan. “It’s very hard for them to pass on rising rice costs to consumers.”

The average price of domestic food rice sold to wholesalers jumped 10 percent from a year ago to the highest since 2006, said Takashi Amou, director of the agriculture ministry’s policy planning division. Prices rose as the largest farmers group paid more to collect rice from growers, who aren’t in a rush to sell under the income-support program, said Kimura, who is also chairman of the Japan Rice Millers and Distributors Cooperative.

Weakening demand and a bumper harvest this year will boost stockpiles of Japanese rice held by producers and distributors to 2.06 million tons at the end of June, up 14 percent from a year earlier, the ministry predicts.

Market Access

The ministry left the limit on the volume of food-rice imports unchanged at 100,000 tons for the year to March 31 even after high domestic prices boosted demand from the food industry for cheaper supplies from overseas.

The country agreed to give minimum-market access to rice-exporting countries at the Uruguay Round of world trade talks in 1993, buying 770,000 tons a year. The remainder is used mainly for production of liquor and livestock feed.

Japan imported a total of 12.03 million tons from April 1995 to October 2012. Of the total, 3.89 million tons was sold to domestic food processors, 2.93 million tons was used as aid to foreign countries, 2.89 million tons was sold to Japanese feed makers and 1.2 million tons was used as table rice, the ministry’s report showed today.

Stockpiles of foreign rice stood at 780,000 tons as of Oct. 31, compared with 880,000 tons at the end of March, according to the report.

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