Increasing Adoption of Foreign Rice by Japanese Residents, a Trend Pre-dating Tariff Discussion
In the face of skyrocketing rice prices last year, Tokyo restaurant owner Arata Hirano took an unexpected step: he switched to American rice. The price of the Californian Calrose rice he purchases has doubled since his initial purchase, but it's cheaper than domestic rice, a fact that doesn't seem to deter Hirano. "Unless domestic prices fall below Calrose prices, I don't plan to switch back," he declared.
His decision to embrace foreign rice might be a harbinger of a change in attitude for Japanese businesses and consumers – a shift that could give Japan some wiggle room to ease restrictions if rice becomes a thorny topic in tariff talks with U.S. President Trump, who has vocalized concerns about Japan's high tariffs on rice.
Wholesale prices for domestic rice have soared about 70% over the past year, reaching their highest levels since 2006. Extreme heat and a tourism boom have taxed crops, and concerns about the future abound. With inflation also raising the cost of living, businesses are betting that Japan's discerning palates and pride in their staple grain may be giving way to a more open-minded approach.
Supermarket giant Aeon recently began selling an 80-20 American-Japanese rice blend, which is cheaper than domestic rice. Fast-food chain Matsuya and restaurant operator Colowide started serving pure American rice this year. At supermarket chain Seiyu, Taiwanese rice has been flying off the shelves since last year. This is a stark contrast to 1993, when the Thai rice the Japanese government imported during a shortage was largely rejected, leaving supermarkets with unsold bags.
For most of the past six decades, Japan's staple rice has been primarily home-grown. High tariffs have protected local farmers from competition, but these tariffs could be a point of contention in negotiations with the U.S. President Trump has criticized Japan's high tariffs on rice, citing a 700% tariff. However, Japanese policymakers dispute this figure, arguing that it's based on outdated international rice prices.
As Japan grapples with supply issues, it's importing more rice than ever before. The amount of tariff-free imports hit the 100,000-ton cap for the first time in seven years in the fiscal year that ended in March 2024. The amount of tariffed imports also jumped, quadrupling in the first 11 months of that year. Rice importer Kanematsu is shipping in its first large-scale purchase of American staple rice, 10,000 tons worth.
Some consumers are pleasantly surprised by the quality and taste of imported rice. Miki Nihei, a customer at Hirano's restaurant, was unaware that the rice wasn't Japanese. "I have no qualms about eating imported rice," she said. "Prices have gone up, so I'm always looking for cheaper options."
This shift in consumer behavior is a reflection of economic necessity, and it remains to be seen how this will impact trade relations between Japan and its trading partners, particularly the U.S.
Enrichment Insights:1. Economic Impact on Japanese Rice Producers: Increased imports of tariff-free rice could potentially hurt the incomes of Japanese rice producers as domestic rice prices may be depressed.2. Competition among Importers and Distributors: With Japan opening up to more imports, there are new opportunities for businesses to source rice from diverse international markets, potentially expanding their business operations and offerings. These businesses may also gain market share from the increased demand for foreign rice products.3. Consumer Behavior: The willingness to buy foreign rice, despite past preferences for domestic products, reflects a shift in consumer behavior driven by economic necessity and the pursuit of cheaper options.4. Trade Negotiations and Inflation: The expansion of rice imports could influence trade negotiations with the U.S. and other countries, possibly leading to adjustments in tariffs and trade agreements. The impact of rice imports on inflation could also influence central bank decisions regarding interest rates. For example, increasing imports could help stabilize rice prices, providing relief to consumers and potentially reducing the rate of inflation.
Sources:[1] Japan Today, [2] Reuters, [3]The Wall Street Journal, [4] Nikkei Asia
- Tokyo restaurant owner Arata Hirano's decision to use American rice despite higher costs shows a potential shift in Japanese businesses' and consumers' attitudes, providing Japan room to negotiate on rice tariffs with U.S. President Trump.
- Extreme heat, a tourism boom, and inflation have increased the cost of domestic rice in Japan, leading businesses to consider cheaper options like foreign rice blends.
- Supermarket giant Aeon and fast-food chain Matsuya have started selling American rice, while Taiwanese rice has been popular at Seiyu.
- Japan has been importing more rice because of supply issues, with the amount of tariff-free imports reaching the 100,000-ton cap for the first time in seven years in 2024.
- Rice importer Kanematsu is shipping in its first large-scale purchase of American staple rice, 10,000 tons worth, as Japan continues to raise its rice imports.
- Some consumers, like Miki Nihei, are delighted with the quality and taste of imported rice and are considering it due to economic necessity.
- The rising trend of importing rice could affect trade relations between Japan and its trading partners, particularly the U.S., potentially leading to changes in tariffs and trade agreements.
