Rice prices plummet dramatically, government buyback stalls in deadlock, and market supply-demand competition intensifies

⑴ After two consecutive years of rising purchase prices for Japan’s new rice, the trend has reversed: the recommended procurement price for early rice this season has plummeted by about 20% year-on-year, and Miyazaki Prefecture’s Koshihikari rice advance payments have tumbled nearly half from their highs. This reflects the overwhelming impact of surplus private stocks on pricing power.⑵ After breaking the 4,000 yen threshold, supermarket rice prices have continued to soften, dropping below 3,500 yen at the start of this month for the first time in a year and a half. Elevated private inventories and government reserve releases are jointly exerting downward pressure, while market expectations for supply adjustments are turning into a wave of demands on policymakers.⑶ The agricultural cooperative system is urging the government to buy back reserves previously released to restore supply-demand balance, but the Prime Minister’s Office rejected the proposal citing concerns about consumer costs. A fast-track resolution by Liberal Democratic Party lawmakers and a public appeal by the top agricultural cooperative leader are combining to exert double pressure, demanding stock replenishment to the 1 million ton level.⑷ However, internally, the Ministry of Agriculture, Forestry and Fisheries is cautious that pre-harvest market procurement may trigger a short-term supply gap. Stocks have been drawn down from their highs to only about 30%, and policy is wavering between price stabilization and supply security. Market sentiment is fluctuating with the rumors, and participants are holding their breath awaiting the next directional signal.