Japan Food Prices:

 Article Source: https://mainichi.jp/english/articles/20220620/p2g/00m/0bu/031000c

Article:

TOKYO (Kyodo) -- Food manufacturers in Japan have been hiking prices as a result of rising raw material and crude oil costs, data showed Monday, dealing a blow to households already hit by the fallout from the coronavirus pandemic.

The average price of cooking oil at supermarkets across the country spiked 1.5-fold in May from a year earlier, while that of mayonnaise was up nearly 30 percent, according to Japanese analysis company True Data Inc.

Raw material and crude oil costs have risen in line with higher demand as economies recover from the coronavirus pandemic and due to global supply chain disruptions. Japan has also seen the cost of imported products rise due to the yen's depreciation against the U.S. dollar and other major currencies.

Ideas:

Just as food prices in other cuntries are increassing its understandable that food prices finally begin to increase.

Maybe in normal economi situations Japanese companies might not pass on their costs t the next in the supply chain which most likely is the final cutomers but these are not normal economic times.

Supply chain distruptions now seem to be consttant or since the pancdemic started have continue to a problem for Japan and its importers.

Households or consumers are always the first and last to feel the change in prices and maybe they might not have any real subsitutes at lower prices and maybe all food price hsve increased.

Article:

While supermarket operators decide the price of products sold at stores, many of them have passed on rising costs from food manufacturers to customers due to the difficulty of absorbing price hikes.

The prices of margarine products, spaghetti and white bread spiked by about 10 percent, according to True Data.

In about a year since spring last year, Nisshin Oillio Group Ltd., a producer of edible oil, has hiked costs five times and its rival J-Oil Mills Inc. has raised prices between five and six times.

Ideas:

Companies maybe for too long have absorbed their price increases and its at the point that they can no longer afford o abosrb costs and now they have to finally pass on their costs to the customer.

Maybe some consumers don't notice the price increases that much but for most consumers the price increases are cutting into any extra income they might havr for other actvities in the economy.

As seen above it seems some companies don't seem hesitant about increaing prices but many companies before now were probably hesitant for fear of losing custmers.

Anytime there are price increases and customers can feel it and it cuts into their extra income that is less inceome for any other economic actvivity 

Article:

As a result, the price of edible oil increased from 213 yen ($1.5) per liter to 323 yen.

A bottle of mayonnaise, with about 400 to 450 grams of content, increased in price from 175 yen to 226 yen.

A recovery in demand following the pandemic has also contributed to pushing up grain prices, with 600 grams of spaghetti rising from 256 yen to 292 yen and a kilogram of wheat increasing 9.0 percent from 233 yen to 254 yen, according to the data.

Ideas:

Price increase across the board will contiue to increase until raw material prices from overseas settles down. The weak yen doesn't help too. 

A weak ye, with increases in impot prices related to raw material cost increases and energy cost increases has not been very kind to the Japanese economy.

But it must be remembered. The Japanese economy is abig econmy, the 3rd largest still in the world. There are still many positives in the economy despit all the news about inflaton and increased costs.

Article:

However, private-sector economists believe food prices will continue to rise as the outlook of Russia's war in Ukraine remains uncertain and the yen's weakness will swell import costs.

"Food and other prices will continue to increase until the impact of the weak yen and high crude oil prices could subside as early as this fall," said Koya Miyamae, a senior economist at SMBC Nikko Securities Inc.

Ideas:

Prices might continue to increase but for a long time Japan lived with deflation or decreasing costs. So even as prices begin to increase and continue to increase eventually prices in Japan might get in line with prices globally.

But thern there is the weak yen situation. Its understandable with Kuroda and the Bank of Japan is doing and will continue to do but eventually maybe the BOJ might need to take some kind of decisive acatin to curb the weak yen.

But of course there are going to be some positives and negatives for whatever action th BOJ takes in the future.

Have a nice day and be safe!