TOKYO, Aug. 25 (Xinhua) -- Sushi, rice balls, curry rice and eel rice - rice is an indispensable part of Japanese people's daily diet. Yet over the past year or so, rice prices in Japan have gone on a roller-coaster ride: prices surged from the summer of 2024, at one point triggering a nationwide "rice shortage," only to fall rapidly since the beginning of this year as inventories grew and newly harvested rice entered the market. Farmers in some producing areas are now even facing the prospect of selling rice at a loss.
Analysts believe that the dramatic shift from consumers being unable to afford rice to producers struggling to sell it reflects an imbalance between supply and demand in Japan's rice market. If prices continue to decline, farmers' willingness to grow rice could be undermined, further weakening the country's agricultural production base.
VOLATILE RICE PRICES
Rice prices in Japan began rising sharply in the summer of 2024, with supermarkets in many areas imposing purchase limits or running out of supplies. The Japanese government released several rounds of reserve rice in an effort to stabilize prices, but the measures had limited effect.
In 2025, prices of rice-related products rose 67.5 percent, the largest increase since comparable records began in 1971. The average retail price for a 5-kilogram bag of rice in Japan reached a record peak of 4,416 yen (about 27.7 U.S. dollars) at the end of last year.
Prices have gradually declined this year. According to the latest data from Japan's Ministry of Agriculture, Forestry and Fisheries, the average retail price for a 5-kilogram bag of rice stood at 3,191 yen during the week of Aug. 10-16.
The arrival of newly harvested rice is putting further downward pressure on prices. Advance payments made by the National Federation of Agricultural Cooperative Associations (ZEN-NOH) to farmers are regarded as an important benchmark for new rice prices. Recent figures from major producing regions indicate substantial reductions in advance payments, suggesting that prices for the new crop could fall further.
According to Japanese media reports, Niigata Prefecture, Japan's largest rice-producing region, has set the advance payment for ordinary Koshihikari rice produced in 2026 at 18,500 yen per 60 kilograms, down 38 percent from the previous year. Hokkaido Prefecture has set the advance payment for its main rice varieties at 17,000 yen per 60 kilograms, a decline of 41 percent.
Some supermarkets have already begun selling rice harvested in 2026, but an unusual phenomenon has emerged: newly harvested rice is in some cases cheaper than older rice. Naoya Matsudaira, assistant professor at the School of Agriculture, Utsunomiya University, said this price inversion between new and old rice could persist.
PERSISTENT IMBALANCE
Whether rice prices are soaring or plunging, the fundamental problem is an imbalance between supply and demand.
In reviewing the "rice shortage" in its 2025 agricultural white paper, the agriculture ministry acknowledged that the government had underestimated rice demand and consequently failed to arrange sufficient planting acreage. High temperatures and other factors also reduced yields and quality, tightening supply. Earthquake warnings and other developments prompted consumers to stockpile rice, further widening the supply gap. Delays in the government's assessment of market conditions and in releasing reserve rice also prolonged the shortage.
Japan's rice market is now facing the opposite imbalance: supply has expanded significantly while demand has weakened.
"Supply and demand are currently out of balance to the worst extent," said Sadao Yamamoto, president of major rice wholesaler ZEN-NOH Pearl Rice.
On the supply side, rice inventories have surged. According to agriculture ministry statistics, private-sector rice inventories stood at 2.43 million tons at the end of June, up 57 percent year on year and the highest level on record. The figure is well above the 1.8 million to 2 million tons generally considered an appropriate level.
The rapid increase in inventories reflects several factors, including expanded planting after the government raised its expectations for rice demand, as well as the release of reserve rice and increased rice imports.
On the demand side, the previous surge in prices appears to have changed consumer behavior.
Masaaki Yamaguchi, a senior analyst at Nomura Securities, said that as rice prices soared, rice consumption in Japan declined again last year. Statistics from an organization supporting stable rice supplies show that Japan's per-capita monthly rice consumption was 4.435 kilograms in fiscal 2025, a 6.1 percent year-on-year decrease and the lowest level in seven years.
Some analysts believe that as rice became more expensive, an increasing number of Japanese households switched to noodles and bread, which are cheaper alternatives.
An editorial in the Tokyo Shimbun noted that although rice prices have fallen, they remain substantially higher than before the "rice shortage," meaning many consumers may still consider rice expensive.
FOOD SECURITY CONCERNS
Falling rice prices have eased the burden on consumers, but they have created new pressure on producers and distributors. Japanese media and experts warn that prolonged low prices could drive some farmers out of agriculture, potentially affecting the country's food security.
Japanese farmers have little reason to celebrate this year's good rice harvest. Production costs have continued to rise, with prices of agricultural chemicals, fertilizers and other inputs pushed higher amid geopolitical tensions in the Middle East.
Ryoji Ito, an assistant professor at Niigata University, said that in Niigata, farmers could face a situation in which "the more they produce, the more they lose" unless they can sell 60 kilograms of rice for between 20,000 and 24,000 yen.
Yoichi Takahashi, a rice farmer in Niigata, said he had calculated his business costs when purchasing agricultural machinery on the assumption that rice would sell for about 24,000 yen per 60 kilograms. With prices now falling, his income could decline by around 10 million yen.
Rice wholesalers are also under pressure. A rice warehouse in Chiba Prefecture is almost full, with about 300 tons of rice from last year still in storage even as the new crop is about to enter the market. To make room for new supplies, low-price competition and clearance sales have already emerged.
Japan's agricultural sector has long faced challenges including high production costs, low efficiency and a shrinking workforce. The large number of small-scale farms and fragmented farmland makes it difficult for farmers to reduce costs and improve efficiency.
The number of agricultural operators in Japan has also continued to decline. In 2025, there were only 836,000, down 60 percent from 2005. Kimio Inagaki, a research fellow at Mitsubishi Research Institute, estimates that the figure could fall to just 200,000 by 2050.
"If rice prices fall to a level that no longer allows farmers to continue growing rice, Japan's rice production could gradually decline," said Yoshito Shinno, president of the Central Union of Agricultural Cooperatives. ■
