TOKYO -- The umbrella organization for Japan's farming cooperatives plans to start selling rice directly in China this fiscal year, seeking to cut out the layers of middlemen that have sent retail prices through the roof.
The National Federation of Agricultural Cooperative Associations, or Zen-Noh, will open a store in a Chinese city to sell such products as milled rice and onigiri rice balls, with more locations to come later. The group is in talks to set up a joint venture with a Japanese company for this purpose. Zen-Noh is the sole exporter of Japanese rice to China.
China consumes 20 times as much rice as Japan and imports 5 million tons a year, much of it from such countries as Thailand and Vietnam. Japan exported just 375 tons of rice to China last year, valued at 160 million yen ($1.45 million). This owes to not only strict safety requirements imposed on Japanese rice, but also prohibitively high prices at stores.
Locally produced rice went for 7 yuan to 33.78 yuan ($1.01 to $4.89 at current rates) per kilogram in Shanghai stores early last year, while Japanese rice cost 99 yuan, according to a survey by the Japan External Trade Organization. "The fees tacked on by multiple wholesalers and retailers have an impact," a senior Zen-Noh official said.
By setting up its own rice store, Zen-Noh aims to establish a new distribution model that keeps local intermediaries out of the process from importation to sale. The group hopes to lower prices and get Japanese rice on the dinner tables of China's growing middle class.