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Commodities

Expensive Japanese rice finding its way around the world

Japanese rice exports grew at a record pace in the first half of this year. Sushi chain operator Genki Sushi has started using Japanese rice at its shops in Singapore.

TOKYO -- Japanese rice exports are growing at a record pace this year. Give credit to the rising popularity of Japanese cuisine around the world, the weakened yen and a narrowing gap between the price of Japanese rice and overseas strains.

     Japan's Ministry of Agriculture, Forestry and Fisheries said Friday that Japan exported 1,880 tons of rice, excluding rice as overseas assistance, during the first half of this year, up 49% from the same period a year earlier. The volume is small compared with Japan's annual consumption of about 8 million tons.

     Shinmei Holding, Japan's largest rice wholesaler, will export 2,000 tons of 2014-harvested rice, double the amount it exported last year. The Kobe-based company is the biggest shareholder of sushi chain operator Genki Sushi, which has started using a Koshihikari strain from Niigata Prefecture at its Singapore stores. In addition, Shinmei plans to boost rice exports to Japanese restaurant chains operating in Hong Kong and other locations.

     Kitoku Shinryo, a big rice wholesaler based in Tokyo, moves Koshihikari and Akitakomachi rice to overseas supermarkets and restaurants. It plans to export 900 tons of 2014 rice, up 80% on the year. In addition to Singapore and Hong Kong, its rice exports to the U.S. have been strong in recent years amid the growing popularity of Japanese food there.

     The National Federation of Agricultural Cooperative Associations has the only certified rice milling plant that is allowed to export rice to China. It is looking to export at least 600 tons to China this year, a 100% increase from 300 tons in 2013.

     The export gains are coming as rice producers are seeking new revenue streams to offset falling prices and consumption of the grain in Japan. Niigata Yuuki, an agricultural products producer based in Niigata, north of Tokyo, will export 130 tons of 2014 Japanese rice, including Koshiibuki. It exported no rice last year. "As domestic demand shrinks, it is more promising for us to create an export channel," said Masashi Sato, president of Niigata Yuuki.

     The narrowing gap between Japanese and overseas rice prices also is pushing up Japan's export numbers. Rice export prices came to 320 yen (about $3.10) per kilogram during the first half of this year, down 4% on the year, according to official statistics.

     In recent years, prices had been four to five times higher than that of California medium-grain rice. Japanese rice is now 3.3 times more expensive, in part due to California's severe drought. California rice is often used by overseas sushi shop chains.

     As with rice for processed foods and animal feed, Japanese farmers are allowed to grow export-use rice only if they secure buyers by the end of June. If there are additional export contracts after that time frame, the farmers have to appropriate some of their more costly domestic-use rice. Some industry insiders are calling for an overhaul of the system.

(Nikkei)

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