Korean media: "Rice prices have finally dropped," but Japanese consumers still can't smile!

On July 20, Korean media outlet The Korea Economic Daily published an article stating that Japan's rice prices saw their first year-on-year decline in 3.5 years. With the ongoing "Reiwa Rice Uproar" since last year gradually subsiding, pressure from rising food prices is expected to ease.

According to the Consumer Price Index (CPI) released recently by Japan’s Ministry of Internal Affairs and Communications for May, rice prices declined by 4.9% compared to the same period last year—marking the first year-on-year drop since November 2022.

In Japan, extreme heat during the summer of 2024 led to potential declines in crop yields and insufficient stockpiles, causing a sharp rise in rice prices. As supply-demand instability persisted, the government intervened to stabilize the market, including releasing stored rice reserves.

Lately, with last year’s harvest entering large-scale distribution, inventory levels have increased, intensifying price competition among retailers, and discount sales have become increasingly common.

According to statistics from Japan’s Ministry of Agriculture, Forestry and Fisheries, the average retail price for 5 kilograms of rice from the first to the seventh of last month was 3,644 yen (approximately 153 RMB), declining for the third consecutive week. This price is about 20% lower than the peak recorded in December of last year.

Rising stability in rice prices has also helped slow down Japan’s inflation. Excluding fresh food, Japan’s CPI growth rate in May reached 1.4%, continuing for the fourth consecutive month below the Bank of Japan’s 2% price stability target.

However, Japanese consumers still feel a heavy burden. Although rice prices have eased, the price per 5 kilograms remains around 3,600 yen. Considering that rice prices were around 2,000 yen before the sharp surge in summer 2024, current levels remain significantly higher than normal.

Market expectations suggest that future stabilization of rice prices will have a significant impact on restoring household real purchasing power and increasing real wages in Japan.

Original source: toutiao.com/article/1871197411044416/

Disclaimer: The views expressed in this article are solely those of the author.