The results of a rare, closely watched auction in Japan that ended this week are about to be released. But there were no paintings or antique cars on the auction block.
The government is selling 165,000 tons of rice — equivalent to roughly two billion bowls — from its emergency stockpile to make up for over 200,000 tons that some Japanese news media say have “disappeared.”
But there’s more to the story.
Japan doesn’t have enough rice, a pillar of its diet. A shortage forced supermarkets to implement buying limits, and soaring prices have driven restaurants to hike prices of everyday food. Things have gotten so dire that, for the first time, the government is tapping its emergency stockpile in an effort to drive down prices.
“Something truly unthinkable is happening, so we must return the current abnormal situation to normal,” Taku Eto, the agriculture minister, told reporters last month, referring to the crisis and the three-day auction that ended on Wednesday.
How did this happen?
Rice started to become scarce in Japan last summer. Experts have attributed that to a confluence of factors, including record summer heat in 2023 that hurt the harvest and natural disaster warnings last August that sparked panic buying.
Japan also strictly limits rice production in order to keep prices high and support domestic rice growers, meaning minor disruptions to the supply chain can have disproportionately large impacts.
An 11-pound bag of rice now costs nearly 4,000 yen ($27), double the price a year earlier. As prices began to rise last year, the authorities warned against panic buying, saying that Japan’s fall harvest would replenish stocks and reduce prices.
Only one of those two predictions came true. Even though the harvest brought in more rice than the previous year’s crop, Japan’s distributors had less to sell in 2024.
“Nobody knows,” said Shuji Hisano, a professor at Kyoto University’s graduate school of economics.
But experts inside and outside the government think they have a pretty good idea.
It has become harder to track rice distribution in Japan because policy changes have given growers more ways to sell rice without going through the traditional major distributors, Professor Hisano said. That trend, plus strict limits on rice production, means that even slight fluctuations in supply and demand can trigger speculative buying and stockpiling.
Speculators are likely now hoarding rice because they think prices will keep rising, said Masayuki Ogawa, an assistant professor of agricultural economics at Utsunomiya University.
“Some businesses and individuals have started to deal in rice as a money game,” he said.
Will this auction help?
We’ll find out in the coming weeks and months.
The government’s decision to sell a portion of its strategic rice reserves at auction was historic. In the past, the stockpile has been reserved for shoring up supplies in the case of natural disasters or crop failures. This is the first time it’s been used to address distribution issues.
The government set aside 231,000 tons to be released, to match the national shortfall. That figure represents more than a fifth of Japan’s total emergency stockpile, which isstored in over 300 locations.
Distributors bid on the first 165,000 tons in the auction, and the results — to be announced on Friday — will show how many tons of it have been sold. The government has said it hopes the rice will start flowing to wholesalers and supermarkets, and that the remaining 66,000 tons will be auctioned off later if needed.
For a nation that runs on rice — the average Japanese person consumed about 110 pounds of rice per year as of 2022, compared with 27 pounds per year for the average American — the uncertainty over rice supplies is disquieting.
“Rice is an integral part of Japanese people’s lives,” Takao Iizuka, 62, said from his store in Tokyo. “I think because there are concerns over whether or not rice is available, Japanese people are worried right now.”
Mr. Iizuka sells rice raw by the bag, and cooked in the form of rice balls with pickled plums, salmon and other fillings. Last month, he was forced to raise the price of his $1 rice balls by about 20 percent to keep up with the soaring prices of their main ingredient.
Now he worries, for the first time in the three decades he has worked at the store, about whether he will be able to source enough rice to last through the next harvest. One of his suppliers told him in January that they had already run out of rice for the year.
“This is the first time I’ve felt this sense of anxiety,” he said.