Japan Food Prices: Updated Jan. 31, 2024.

 

'Olive oil shock' hits dining tables in Japan as prices of some products rise by over 50%

Article Source: https://mainichi.jp/english/articles/20231116/p2a/00m/0bu/014000c

Ideas:

Unfortunately, there are some who might increase prices because of the popularity of some products. No doubt the poor growing season always has an effect on crop prices and olive oil is no exception.

Of course the weak yen and increased transportation costs have contributed to the higher prices, as Japan is a resource poor country, and has to import much of what it needs.

Maybe many restaurants are also blending oils as a way to reduce costs. For example, I want to a Italian restaurant in Yokohama recently and the restaurant had increased prices by about 300 yen for the order we had, which was usually about 3,500 yen, but this 3.800 yen, $35.000 in one to one terms, and it also has olive oil for use on the pasta and pizza.

Again, growing seasons, good or bad, have an effect on prices globally. For example, in South Korea, corn is/was used for feeding farm animals, but the US, which probably the biggest producer of corn, had a major drought that year. As a result, corn prices in South Korea, and probably globally, increased a lot, to the point that many South Korean farmers went bankrupt that year.

It will be interesting to know if regular consumers, who buy olive oil for use in their homes, have cutback or reduced the amount they buy because of the increase in prices.

Sometimes, governments will introduce price controls on products they feel are needed for everyday living, such as milk and eggs, but I doubt the Japanese government feels olive oil is needed daily product.

Most likely the higher prices will continue in 2024 until the supply is back to normal, which might take some time for the supply to get where it should be.

It could easily be estimated that the higher olive oil prices are here to stay, as maybe global warming and in general higher temperatures might keep the olive oil crop supply less than normal in the years to come.

For imports, and olive oil the volume may continue to decrease, as for example, in past years, Spain has placed a limit on exports for certain products such as sunflower oil and olive oil.

If possible, this is good time for other global producers to step-in and provide more olive oil production, if possible, if there are other global areas where the growing season is compatible with the production of olive oil.

For example, when the US and China were having trade difficulties and soybeans produced in the US were essentially banned in China, Brazil stepped in and provided the needed soy beans. 

Of course many countries might produce their own olive oil, such as in Japan, but is the quality as good as the Spain olive oil, and can anyone tell the difference between the Spain olive oil and Japan's olive oil.

And yes, global warming is present in Japan, and might affect many products and of course society and the environment too.

But this might be a chance, for Japanese producers of olive oil to produce their own, while the higher prices are continuing in Spain, and maybe the Japanese olive oil, with a little lower price will become popular among Japanese consumers. 

But like everything, once a product becomes a name brand type product, and is planted into the mindsets of consumers, its hard for other products to change consumers minds.

The global oil crisis of fifty years ago was about gas/energy/oil and not olive oil. But no doubt global warming is going to affect many products globally, which means supplies could be affects and which means transportation costs might increase too.

What countries like Japan need to do is negotiate to keep the prices low and also the transportation price low too.

Its not uncommon to negotiate on/in produce markets, options to set future prices for future crops, such oranges, olive oil, etc. And the same with energy production supplies.

Have a nice day and be safe!