【News】 Bidding prices of rice imported under SBS continue to decline, raising concerns over negative impacts on domestic market (March 4, 2017)

The Ministry of Agriculture, Forestry and Fisheries (MAFF) completed a series of imported rice tenders for fiscal 2016 on March 3 under its Simultaneous Buy and Sell system (SBS), which tenders were carried out six times in the year.

Last year, the state-controlled SBS auctions attracted press coverages on alleged mispricing of imported rice deals with so-called “adjustment money” paid by trading firms to wholesalers and distributers in Japan.

Although payments of “adjustment money” were banned since the second tender in fiscal 2016, major varieties of imported rice have been continuously bided at new low prices in five SBS tenders since the second one.

According to MAFF, 44,766 tons of the general quota rice was imported under the SBS system, which are mostly purchased by restaurants and food stores in the country.

U.S. medium grain milled rice harvested in 2016, occupying almost 70 percent of rice imported through the SBS general quota, was sold at a weighted average price of 148 yen per kilogram since the second tender in fiscal 2016 when MAFF banned the payment of “adjustment money,” which is lower than that produced in the previous year by about 20 percent.

The imported rice from U.S. is cheaper by 40 percent than B-class milled rice produced at Kanto Region in Japan which is sold in the direct transactions at an average price of some 240 yen per kilogram.

An average bidding price of Australian short grain brown rice, the second major rice next to U.S. rice in the SBS auctions, has also been continuing to decline and hit the lowest record of 160s yen per kilogram on March 3.

The total amount of rice imported under the SBS system remarkably increased to 73,314 tons in fiscal 2016 from 29,315 tons in fiscal 2015.

This entry was posted in Food & Agriculture, Trade Talks. Bookmark the permalink.