Rice prices keep falling. The spike has eased, but warehouses are now holding far more old rice than usual, and in Aichi Prefecture new rice is selling for less than last year's crop — a reversal of the normal order.
At Watanabe Beikokuten, a rice shop in Okazaki, Aichi Prefecture, new rice and old rice from last year sit side by side on the shelves. Aomori-grown Asayuki brown rice is priced at ¥840 a kilogram. Asked what it sold for last year, owner Masaaki Watanabe said about ¥900.
He cannot cut the price further because he bought the stock at a high price. "I have never seen old rice pile up like this, and there has never been a price gap this wide," he said.
Supermarket prices fall back to ¥2,821
Supermarket rice hit a peak of just over ¥4,400 for 5 kilograms at the start of the year, then slid. Since September it has traded in the ¥2,000 range, and the latest price is ¥2,821 for the week of October 12 to 18.
Watanabe is selling his old stock at a loss. "Holding old rice just means selling it at clearance prices," he said.
Normally by this time of year last year's rice is almost gone from his shelves — two rows at most, three at a push. This year he bought in more than usual, and the old crop is still there in bulk. "Prices used to move in small steps, and I have little experience of rice simply not being available," he said. "Working out how to handle this, contracts included, has become difficult."
Hill farmers outside the economies of scale
Rice farming looks unstable as a business when prices swing this hard. Farmers in hilly areas, who find it hard to scale up or adopt IT and large machinery, are the most exposed.
KINO Farm sits in the Shimoyama district of Toyota, Aichi Prefecture. Its representative, Takaharu Kinoshita, left a salaried job eight years ago to farm full time. Asked whether some growers will give up as prices fall, he said, "I think more farmers will decide they cannot continue in this situation."