Japan’s Rice Stockpile Jumps to 15-Year High as Consumption Ebbs

Japan raised the forecast for its domestic rice stockpile to a 15-year high as consumption wanes and farmers harvest a bigger crop.

Inventories of Japanese food rice held by local producers and distributors may expand to 2.55 million metric tons as of June 30, 2014, from 2.24 million tons a year earlier, the Agriculture Ministry said in a report today. The ministry had projected 2.31 million tons in July. The new estimate is the highest since at least 1999, according to ministry data.

Domestic consumption will drop 1.1 percent to 7.78 million tons for the year beginning July 1, 2014, after higher prices weakened demand from the local food industry. The ministry set its production target for the grain next year at 7.65 million tons, the lowest-ever level.

Wholesale prices averaged 16,510 yen ($162) a bag in the year through September, rising 8.5 percent from a year earlier, according to the ministry report. One bag contains 60 kilograms.

Japan, which grows enough rice to feed itself, imposes a 778 percent tariff on imports and pays subsidies to growers.

The government approved a plan on Nov. 26 to end a 40-year policy that pays producers to reduce crops by the end of March 2019.

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