Bloomberg News

Japan Cuts Rice Output Target as Radiation May Weaken Demand

November 30, 2011

(Adds ministry official comment in fourth paragraph.)

Nov. 30 (Bloomberg) -- Japan cut its production target of rice for food after this year’s harvest exceeded consumption and as demand may decline further after discoveries of grain tainted by radioactive cesium.

Output will be 7.93 million metric tons in 2012, down from this year’s target of 7.95 million tons, the Ministry of Agriculture, Forestry and Fisheries said in a report today. The harvest reached 8.13 million tons as of Oct. 15, outpacing demand of 8.05 million tons in the year to June 30, 2012.

Good weather boosted grain production in Japan this year even after a record earthquake and tsunami in March destroyed some paddy fields in the nation’s northeast. Fallout from a crippled nuclear plant in Fukushima prefecture contaminated rice in the region with cesium, triggering a shipment ban and boosting food-safety concerns.

“Safety concerns may weaken consumer demand for the grain,” Takeharu Imashiro, director-general for the ministry’s crop production department, said today. “We will take appropriate measures to address the concerns.”

Farmers adjust their planting of the grain every year in line with the government’s production target. Some fields may be barred from planting next year because of contaminated soil, according to the ministry.

Inventories Climb

Inventories of rice for food held by producers and distributors will increase to 1.89 million tons at the end of June 2012 from 1.81 million tons a year earlier, according to the report today. The volume will be the highest since 2010, the ministry said, revising its July forecast that stockpiles may drop to a four-year low of 1.7 million tons.

The government plans to hold 910,000 tons of domestic rice for food in reserves at the end of June next year, up from 880,000 tons a year earlier.

Japan extended a ban on rice shipments beyond Fukushima City yesterday after authorities found grain with cesium levels exceeding the official limit had been sold to consumers.

The ban includes the Oguni and Tsukidate areas of Date City, which neighbors Fukushima City where the first case of rice exceeding the limit was detected earlier this month. About 9 kilograms of rice from Oguni was sold to local buyers.

Japan, the largest corn importer, is self-sufficient in rice and the government protects growers from foreign competition with an import tariff of 341 yen ($4.38) a kilogram.

The country agreed to give minimum-market access to rice- exporting countries at the Uruguay Round of world trade talks in 1993, buying 770,000 tons a year.

Japan imported 11.29 million tons of rice from April 1995 to October 2011. Of the total, 3.75 million tons was sold to domestic food processors, 2.74 million tons was used as aid to foreign countries, 2.44 million tons was sold to Japanese feed makers and 1.12 million tons was used as table rice, the ministry’s report showed today.

Stockpiles of foreign rice stood at 960,000 tons at the end of October, up from 870,000 tons on March 31, the ministry said.

--Editors: Jarrett Banks, Richard Dobson

To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net


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