Japanese Retail Rice Prices Climb Again Despite New Harvest, Sparking Retailer Concern

Retail Rice Prices See Renewed Increase

Japanese retail prices for rice have once again begun to climb, even with the introduction of the new harvest to the market. Data released by the agriculture ministry last week indicates that the average price at supermarkets nationwide stood at ¥4,275 per 5 kilograms, marking an increase for three consecutive weeks. This figure approaches the record high of ¥4,285 per 5 kilograms observed in May 2025.

The upward trend is causing apprehension among retailers, who fear that elevated prices will deter shoppers and subsequently diminish their profit margins. Many budget-conscious consumers are reportedly opting for the lower-priced 2024 rice, further impacting the sales of the more expensive new crop.

Factors Driving the Price Surge

Several factors are contributing to the unexpected rise in prices for the new rice crop:

• Elevated Procurement Costs: Procurement prices for rice harvested in 2025 have seen a significant increase, rising by up to 70% from the previous year, depending on the specific brand.
• Intense Dealer Competition: A heightened sense of urgency among dealers to secure rice has led regional farm associations, known as Japan Agricultural Cooperatives (JA), to increase their preliminary payments to farmers. For instance, JA Zen-Noh Niigata offered a record-high ¥30,000 for 60 kilograms of 2025 Koshihikari brown rice, representing a 76% increase compared to the previous year. This fierce competition is a primary driver of the higher prices.
• Persistent Supply Concerns: Despite projections that 2025 production will exceed demand, the intense competition for rice in the market is maintaining high price levels.

Retailers are attempting to mitigate the impact on consumers by absorbing some of the increased costs. For example, some stores are raising retail prices by approximately 20%, even when their purchase prices have surged by about 50%, to avoid alienating customers.

Broader Context of Rice Price Volatility

The current price increases are part of a larger trend of volatility in the Japanese rice market that began in 2023 and 2024. Underlying causes for this broader surge include:

• Climatic Disruptions: A record hot summer in 2023 negatively impacted harvests, leading to a reduction in both the quality and quantity of rice produced.
• Panic Buying: An earthquake warning in August 2024 triggered widespread panic buying and speculation, contributing to stock withholding.
• Demographic Shifts: An aging farming population and a decline in new entrants to agriculture have led to labor shortages and reduced production capacity.
• Global Economic Factors: The depreciation of the Japanese Yen has increased the cost of imported agricultural inputs such as fertilizers and fuel.
• Increased Demand: A resurgence in the food service industry, a boom in inbound tourism, and a growing foreign population have collectively boosted demand for rice.

Previous government interventions, such as the release of emergency rice reserves in February 2025, provided only a temporary respite, with prices quickly rebounding.

Outlook for Consumers and Retailers

The sustained high prices are creating financial strain for Japanese households, particularly for elderly consumers who view rice as an essential staple. One resident in Tokyo's Kita Ward, in their 70s, expressed dismay after purchasing 5 kg of new rice for just under ¥5,000, recalling prices around ¥3,000 a few years prior.

Retailers anticipate that if the current situation persists, there may be an increased demand for lower-priced foreign rice varieties as consumers seek more affordable options.