Japan Rice Supply Chains: Updated June 15, 2025.

Soaring rice prices in Japan spotlight rigid supply chain structure

Article source: https://mainichi.jp/english/articles/20250606/p2g/00m/0bu/011000c

Ideas

There must be a reason for the mult-layered supply chain as you would think a more simple supply chain of grower, processor, middleman, and the store would be enough.

Of course that is why maybe prices on some products are very high in Japan because of the complicated supply chains.

Everyone in the supply chains seems to want their cut or their gauranteed profit which all in the supply chain increase the price when it gets to them.

There might be many more in the supply chain that that listed in the article such as many more wholesalers where the products gets passed around from wholesaler to wholesaler before it reaches the supermarkets.

And even the Japan Agricultural Cooperative might move the products around from location to location before it even reaches the wholesalers too, as they might have arrangemtns that need to be taken care of in the cooperative.

The adding on of transporation fees and profits margins is nothing new around the world but in Japan its seems to take on a completely different meaning, as Japan's supply chains seem to be much more complicated and long compared to other countries.

Ultamtately its the final consumer the Japanes household that might suffer with the higher prices, but at the same time, the long/complicated supply chains might provide for many more jobs in Japan.

There are always going gto be positives and negatives in any system or supply chain and offering advanced payments to farmers to help with cover living and operational costs might be a good thing.

But then the negative might be later prices for products in the system might be higher because of the advanced payments, so there are positives and negativs to the supply chain system in Japan.

Yes, the Japan supply chain system might have some rigid parts to it, but until August of 2024 it seemed to be somewhat stable and good for Japan, or at least it seemed that way.

And yes, the market system in Japan might be too rigid not allowing for enough freedom of movement related to the supply and demand of products and especially fruits and vegetables.

So maybe the rice shortage of the summer of 2024 might turnout to be a good situation as it exposed the weaknesss of Japan's rice distribution system and how it not really based on supply and demand but more based on the cooperatives system of payments.

Can we call the summer of 2024 a market failure situation where rice, a staple for Japanese households, became a scarce resource.

That alone should be considered a major emergency but it took the Japanese government until early 2025 to release the rice reserves when they should have been released during the summer of 2024.

It appears the JA is/was acting like a cartel and controlling the price of rice instead of letting the market decide what the price should be.

And when the JA purchased the prices at high prices then then moved the rice products throught the Japan rice supply system and when it arrive at the supermarkets the price was already much higher than expected.

And again the JA was able to get 296,00 tons of the auction rice, or about 95 percent of the reserves which means kind of strange as again, it is/was acting like a cartel and not letting rice buyers get any of the reserves.

And in that way, again, the were able to control the rice market and drive the prices much higher than what the market prices should have been.

Supplying stockpiles through direct contacts is both a positive and negative but it definitely was better than the previous system which seeme to be like a cartel controlling the rice market.

Direct contacts might sound good but it cuts out the middleman which is not good too as they need to make a living. A better approach might be the reduce the overall middle group and just keep the essential middle group as a way to keep the price down as much as possible.

In this case, market invention might be needed, as again, the JA appeared to be a cartel that controlled the rice market and had no real intention of lowering rice prices for the good of Japanese society or Japanese households.

Market invervention is often needed with there is market failure or some group has too much market power, which seems to be the case with the JA and rice prices.

There needs to be as many retailers as possible selling the reserve rice and not just be for a few limited retailers and again that might look like a cartel type situation doing exactly the same thing as the JA was doing.

As some earlier articles have suggested, some farmers and even the JA might be holding back the rice that is actually out there wating for even higher prices to hit the market .

There should never have been a rice problem in Japan as rice is a major staple and should always be made available like eggs, milk, bread and maybe some kind of meat.

Even if Japan has to import more foreign rice and make sure the foreign rice is a little cheaper in order to get Japanese consumers to buy it and begin to like it and then there might be a continuous flow of rice into the supermarket at reasonable prices for Japanese households.

Have a nice day!