Japan’s rice exports rise 40% year-on-year amid bad harvest in the U.S.

TOKYO, May 31 — Japan’s exports of rice this year are increasing at a pace of more than 40 percent from a year before, exceeding last year’s strong growth.

The rise is driven mainly by shipments to the United States.

With prices of U.S.-grown rice rising sharply due to drought, orders for Japanese rice are going up as the weak yen makes the product look reasonably priced.

At stores in the U.S., some U.S. rice products ended up being priced higher than Japanese rice.

The key to further boost exports is to come up with measures to make Japanese rice take root in the U.S. market.

According to the Ministry of Agriculture, Fisheries and Forestry, rice exports totaled 1.96 billion yen in the January-March period, up 37 percent from the same period last year. The shipments amounted to 7,686 tons in terms of volume, also up 37 percent.

The growth of shipments to the U.S., already one of the top destinations for Japanese rice exports, was particularly high, more than doubling both in terms of value and volume.

Canada-bound exports expanded greatly, up 4.5 times from a year before, as dealers shifted from U.S. rice to Japanese rice.

Such a trend emerged because major production areas of Japonica rice including the U.S. were hit by drought, leading to a sharp decline in the supply of rice harvested in 2022.

Production of short- and medium-grain rice in the U.S. in 2022 dropped 30 percent from the previous year to total 1.46 million tons, according to the U.S. Department of Agriculture.

The decline in production was particularly large in California, the top grower of such rice in the country, and California-grown rice was traded in May at prices around 60 percent higher than in an average year.

Retail prices of U.S. rice are also increasing.

According to the Japan External Trade Organization, retail prices of rice in major U.S. cities between December last year and March this year were 3.4 dollars (470 yen) to 6 dollars (840 yen) per kilogram for U.S. rice and 4 dollars (560 yen) to 5.3 dollars (740 yen) for Japanese rice.

Price differences between U.S. and Japanese rice products, which had been large, are now narrowing, with the price of U.S. rice even exceeding that of Japanese rice in some cases.

More orders are coming for Japanese rice on the backdrop of price increases of rice made in other countries. “We are seeing a rise in new deals to ship products to North America and Europe,” said an official of a major rice wholesaler in Japan.

While the rice yield is expected to recover in California in 2023, it is unlikely that distribution prices will go down immediately since the production costs in the region have been high.

The narrowing price gap offers a chance for Japanese rice to increase presence in the U.S., but experts say it is necessary to make efforts to capture stable demand in the U.S. market in addition to relying on foreign crop conditions or currency situations.

The Japan Rice and Rice Industry Export Promotion Association plans to boost U.S.-bound shipments by making sales proposals that meet local needs, such as tapping into potential at restaurants and e-commerce.

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