Japan Faces Significant Rice Shortfall Due to Bad Weather and Increased Tourist Demand
Japanese rice, integral to iconic dishes like sushi, onigiri, and yakitori don, is facing its largest shortage in decades. This shortfall has been attributed to a combination of adverse weather conditions, a surge in tourism, and stringent rice policies in the country.
According to a report by the U.S. Department of Agriculture (USDA) released last week, Japan has experienced a significant table rice shortage throughout the summer of 2024. Over the past three years, demand has outstripped production, leading to the lowest rice stock levels in over 20 years. The USDA also noted that consumers have been stockpiling rice in preparation for the typhoon season and a major earthquake warning.
In August, supermarkets frequently ran out of white rice, leading stores to limit purchases to one bag per customer. Local media outlet NHK has partly attributed this shortage to an influx of tourists, which has driven up demand for sushi and other rice-based dishes. Rice prices hit 16,133 yen ($112.67) per 60kg in August, marking a 3% increase from the previous month and a 5% rise since the beginning of the year.
Data from Japan’s Ministry of Agriculture, Forestry, and Fisheries show that private rice inventories stood at 1.56 million tons in June, the lowest in years. The increase in table rice demand has been further driven by the rising number of tourists, enhancing demand in the food service sector.
Joseph Glauber, a senior research fellow at the International Food Policy Research Institute, pointed out that the Japanese rice economy remains largely insulated from the global market. Oscar Tjakra, a senior analyst at Rabobank, estimated that rice consumption by tourists increased from 19,000 tons between July 2022 and June 2023 to 51,000 tons from July 2023 through June 2024. Despite this rise, tourist consumption remains small compared to Japan’s annual domestic rice consumption of over 7 million tons.
Japan welcomed a record 17.8 million visitors in the first half of 2024, surpassing pre-pandemic levels. This upward trend continued with 3.3 million inbound tourists in July, the highest ever recorded according to Japan’s tourism statistics.
Tjakra highlighted that table rice production in Japan has been falling, partly due to the retirement of aging rice farmers and a lack of younger individuals entering the profession. Additionally, heatwaves and droughts in the latter half of the previous year have further impacted harvests.
While smaller rice harvests and foreign demand for sushi contribute to the shortage, the nation’s rice policies are the primary underlying factor, said Glauber. Japan imposes a 778% tariff on imported rice to protect domestic farmers. Although Japan is committed to importing around 682,000 tons of rice annually under World Trade Organization obligations, this rice is predominantly used for processing and feed, remaining largely isolated from Japanese consumers.
Rabobank’s Tjakra noted that rice exports from Japan have increased sixfold from 2014 to 2022, reaching nearly 30,000 tons.
The rise in rice prices has contributed to an increase in Japan’s headline inflation, which rose by 2.8% year-on-year in August, driven by higher energy and food costs. Notably, rice and chocolate prices were among the largest drivers in the food basket.