Demand of imported rice for food service is strong in Japan

TOKYO, Feb. 21 — Japan’s purchases of imported rice have reached the limit of 100,000 metric tons through the simultaneous buy and sell (SBS) tendering system in fiscal 2017.

The purchases highlight the shortage of cheap Japanese-grown rice for the food service industry.

The fifth round of the SBS tenders in the fiscal year ending March 31 was held on Feb 20. A total of 14,898 metric tons of imported rice from all origins was successfully bid during the auction, fulfilling the target of 100,000 metric tons, the agriculture ministry said.

Of those tons, the U.S. was the largest supplier with a market share of 58 percent, followed by Australia at about 33 percent.

The agriculture ministry regularly tenders for rice imports throughout each fiscal year, to fulfill the nation’s annual import commitment to the World Trade Organization (WTO).

Japan is obliged to buy 770,000 metric tons of foreign rice each year, and it uses two tendering systems — minimum access and the SBS.

The minimum access tenders account for the majority of Japan’s imports. These initially end up in government warehouses.

And up to 100,000 metric tons can be traded in the SBS system and passed to end users, which are largely in the food service sector. The ministry sets the volume for SBS tenders depending on domestic market conditions. .

Domestic prices for table rice are expected to remain high as the government is encouraging growers to shift rice to be used for animal feed. That makes imported rice more attractive to the Japanese food service industry.

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