Japan Faces Surge in Rice Prices Amid Rising Core Inflation

Japan is experiencing a significant increase in rice prices, with costs nearly doubling compared to the previous year, as core inflation continues to rise in the world’s fourth-largest economy.​

Official data released today indicates that consumer prices, excluding fresh food, rose by 3.2% in March year-on-year, up from 3.0% in February, aligning with market expectations. When excluding energy, prices increased by 2.9% in March, compared to 2.6% in February. Overall inflation eased slightly to 3.6% from 3.7%.​

The Internal Affairs Ministry reported that both fresh and non-fresh food products, as well as hotel fees, have seen price increases. Grain prices have risen by 25.4%, with rice prices experiencing a substantial 92.5% jump. Factors contributing to this surge include poor harvests due to hot weather in 2023, panic-buying prompted by a “megaquake” warning last year, and increased consumption driven by record numbers of tourists. Additionally, some traders are believed to be hoarding the grain.​

In response to the rice shortage, the Japanese government began auctioning its emergency rice stockpile last month, a measure not taken since the stockpile’s inception in 1995. Approximately 210,000 tonnes have been released, with plans to auction an additional 100,000 tonnes this month.​

The surge in rice prices has also influenced international trade dynamics. The United States has accused Japan of imposing a 700% tariff on U.S. rice imports, a claim that Japan’s farm minister has called “incomprehensible.” This issue has been a factor in U.S. President Donald Trump’s decision to impose a 24% tariff on Japanese imports, which is currently paused.​

Beyond rice, other food items have also seen significant price increases. Cabbage prices soared by 111.6% in March compared to the same month last year, attributed to last year’s record summer heat and heavy rain that ruined crops, leading to what media have termed a “cabbage shock.”​

The escalating food prices are placing additional pressure on Prime Minister Shigeru Ishiba’s government to implement measures to assist consumers and stabilize the economy.