Japanese rice is sold in China at 1,300 yen per kilogram, out of which 720 yen is granted to Chinese distributors as margins, according to a survey by the Ministry of Agriculture, Forestry and Fisheries submitted to the Liberal Democratic Party’s committee on agricultural trade on Tuesday, June 18.
An agricultural ministry official said that distributors are receiving too much margin, adding it is one of the factors which hinder Japan’s rice exports to China.
According to the survey conducted in fiscal 2011, the retail price range of Japanese rice in Chinese markets was between 1,100 yen and 1,300 yen. Based on the data, the ministry estimated that the distributor margin in China is roughly 720 yen, accounting for as much as 60% of the retail price. The free-on-board (FOB) export price, which is the price of goods plus costs of delivery to a designated vessel at a port of departure, was estimated at 410 yen, and customs duties at 180 yen.
Japanese brand rice such as Koshihikari and Akitakomachi are also grown in China, and such China-grown Japanese rice was sold at 200 yen to 260 yen per kilogram, less than one-fifth of price for rice exported from Japan. The ministry official stressed that the price gap is beyond the acceptable range, even taking into consideration the difference in quality. Many LDP committee members expressed concerns over the huge price gap.
The ministry said that although Japan’s rice exports doubled in the last five years, the total volume remain around 2,000 tons annually. 70% of the exports go to Hong Kong and Singapore, and China-bound exports were 100 tons at the most.
The ministry also showed the retail prices of rice sold in Hong Kong and Singapore. In both markets, the price of Japan-grown rice was roughly twice the price of rice from the United States.
(June 19, 2013)