Since the World Bank has predicted that rice prices will remain high for the next two to three years, Japan may open its warehouses to release part of its surplus rice stocks to help ease the global shortage.
Japan entered into an agreement last week to sell 50,000 metric tons of homegrown rice to the Philippines on a cost-and-freight basis. The first shipment is expected to arrive by the third quarter of the year. The Philippines needs to import about 2.1 million metric tons a year to meet domestic demand.
Apart from that sale of homegrown grain, Japan may send 200,000 metric tons of imported rice reserves to the Philippines as aid, Toshiro Shirasu, vice minister for agriculture, forestry and fisheries, told a press conference on Monday, according to Kyodo News. Unlike many other Asian countries, which have had to worry about severe shortages of rice in recent months, Japan had piled up about 2.3 million metric tons of surplus rice as of the end of 2007. Inside its air-conditioned public warehouses, there are about 1.5 million metric tons of imported rice, mostly from the United States, as a byproduct of global trade talks in the 1990s to open Japan's markets.
The disastrous rice shortage in Japan during World War II traumatized its populace, and in reaction the government moved to regulate the rice market closely. Tokyo has been maintaining the nation's rice supply at around 8 million metric tons a year in recent years.
Excess rice will be bought by the government from the market so as to protect the livelihood of domestic farmers. The government also keeps a million metric tons of rice in storage to safeguard a stable supply in years of lean harvests.
Although Japan is self-sufficient in rice production, it has been importing 770,000 metric tons a year to meet its obligations under the Uruguay Round of global trade talks, which resulted in an agreement signed in 1995. Since Japanese households prefer high-quality Japanese rice over the varieties on offer from other countries, the imported rice is used to feed animals or as an ingredient in food and beverages. Mostly, however, it goes into climate-controlled storage.
Thus, Japan can readily release the imported rice to developing countries without hurting its own market, even though it will need to obtain consent from the United States, as the trade agreement stipulated that the imported rice must be consumed within Japan's borders. Trade representatives from Tokyo and Washington met last week, and a second meeting is scheduled for this Friday to discuss the issue, U.S. News & World Report said on Tuesday.
World rice prices have almost tripled and hit a record of $1,000 per metric ton this year. The rising price has caused riots and smuggling in some countries. World Bank Managing Director Juan Jose Daboub on Tuesday urged rice exporters to release an additional 1 million tons of rice into the world market. The Bank projected that rice and other staples will remain scarce and expensive for the next two to three years, driving up inflation across the globe. (See: " World Bank's Sour Outlook On Food Prices")
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