Japan's rice crisis flips: From shortage to glut in a year

Japan, which suffered an unprecedented rice crisis last year, now faces the opposite problem. While supply failed to keep pace with demand and prices surged last year, this year the country is grappling with oversupply and collapsing prices — and the new harvest has not even arrived yet.

The Nikkei recently reported a clear and growing rice glut in Japan. According to the Ministry of Agriculture, Forestry and Fisheries, private rice stockpiles stood at an estimated 2.21 million to 2.34 million metric tons as of the end of last month — well above the optimal range of 1.8 million to 2 million metric tons, and nearly 300,000 metric tons over that ceiling.

Those figures include holdings not only by large buyers and wholesalers surveyed monthly, but also by smaller rice dealers and producers. Drawing on recent consumption trends and industry sources, the Nikkei expects actual inventories to be even higher. The Japan Agricultural Cooperatives (JA) estimates that stockpiles could swell to as much as 2.4 million metric tons as of the end of last month. That would be the highest level since June 2015, when stocks stood at 2.26 million metric tons — an 11-year peak.

The Nikkei attributed the glut to two compounding factors: inventory that has been building since last year's shipments, and the crop due for harvest this fall — both pointing to oversupply. Paradoxically, last year's rice crisis is itself the root cause.

From the summer of 2024 through last year, supermarket shelves across Japan were stripped bare. Abnormal weather in the summer of 2023 sharply reduced the supply of market-quality rice, and in 2024 a series of earthquake alerts and major typhoons triggered panic buying of rice and water, making the shortage suddenly visible. A surge in tourists pushed restaurant demand far beyond projections, while Japan's longstanding policy of gradually cutting annual output to account for a shrinking population compounded the crunch. Rice imports last year totaled 96,834 metric tons — a 95-fold increase from the previous year.

The crisis set two forces in motion. On the consumer side, people cut back on rice. Per-capita consumption had already been declining year by year, but the shortage accelerated a trend the Japanese call "kome-banare" — a drift away from rice — as households switched to more Westernized diets. From the second half of last year, bread, pasta, udon and other wheat-based foods increasingly replaced rice at the dinner table.

Farmers, meanwhile, responded by ramping up production. The 2026 crop, due for shipment this fall, is forecast to be overproduced. Planting intentions compiled across prefectures as of late April put total output of staple rice at 7.33 million metric tons — 220,000 metric tons above the ministry's own projection of 7.11 million metric tons.

With supply now in excess, purchase prices have fallen to roughly half of last year's levels and are expected to drop below production costs. Under the Food System Act, which took full effect in April, production costs work out to 20,535 yen ($127) per 60 kilograms. JA had expected 20,000 yen to serve as a floor even if purchase prices dipped below last year's. But as the inventory overhang has worsened, the view that the 2026-crop purchase price will fall below 20,000 yen has gained traction.

Tomonori Horikawa, head of the rice division at JA Zen-Noh Niigata in Niigata City, told the Nikkei that "given the current situation where rice consumption is not materializing as expected, and the surplus volumes anticipated going forward, it is difficult to offer an advance payment in the 20,000-yen range based on cost indicators."

Retail prices for a 5-kilogram bag of polished rice currently stand at around 3,500 yen. Horikawa said that if the 2026-crop purchase price falls to the mid-to-high 10,000-yen range — roughly 50 percent below last year's level — "the retail price for a 5-kilogram bag of polished rice would likely end up in the high 2,000-yen range." That would ease living costs for consumers, but leave farmers unable to recoup even their production costs.