Japan to raise domestic wheat price by 5.8% from April

NISSHIN SEIFUN

14/03/2023 07:20

By Yuka Obayashi
       TOKYO, March 14 (Reuters) - Japan will raise the price
at which it sells imported wheat to domestic flour mills from
April by an average 5.8% from the previous year to reflect
higher import prices over the past six months, the farm ministry
said on Tuesday.
    The price rise would have been 13.1% if calculated according
to the standard formula, but it was lowered to soften the burden
on households suffering from higher commodity prices, the
ministry said. 
    Still, the rise will hurt households already grappling with
cost-of-living pressures amid elevated inflation for food and
energy. 
    Japan buys five types of milling wheat from the United
States, Canada and Australia through import tenders and sells to
domestic millers at prices set twice a year.
    The government last year held off on raising the price for
the October-March period.  urn:newsml:reuters.com:*:nL1N30G09Z
    For the six months starting April 1, the ministry's wheat
selling price to local millers will average 76,750 yen ($575)
per tonne, up from 72,530 yen the previous year.
        The price was based upon average import prices over the
past six months, but it would have been 82,060 yen if calculated
under the standard formula using import prices over the past
year, the ministry said.
    "After considering the predictability of wheat prices, our
policy of promoting domestic wheat production and burden on
consumers, we have taken a measure to mitigate drastic changes
to partially restrain the hike rate as a special case," Kenichi
Hirano, director of the grain trade and operation division of
the ministry, told a news conference.     
    Global wheat prices surged last year amid fears of a
shortage following Russia's invasion of Ukraine and the yen's
plunge against the U.S. dollar.
    Imports accounts for more than 80% of Japan's total wheat
demand.
    "We need to reduce dependence on wheat imports and
strengthen the domestic production base by switching from
imported wheat to domestic wheat and rice flour," Hirano said. 
    ($1 = 133.5700 yen)

 (Reporting by Yuka Obayashi; editing by Jason Neely)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))