Japan's farm ministry said Wednesday it will raise the average price at which it sells imported wheat to the country's milling companies by 17.3 percent from April, nearing a 14-year high, as Russia's invasion of Ukraine stokes fears of global supply disruptions.
The average price of five major wheat brands will be 72,530 yen ($626) per ton in the April-September period, the second-highest level since the current calculation methods were adopted in 2007, following 76,030 yen marked in the six months from October 2008, according to the ministry.
The third straight sixth-month period of hikes is almost certain to be another blow to many consumers in Japan, which is highly dependent on imports for its food and energy needs.
As consumers brace for various price increases in the coming months, due to reasons ranging from the coronavirus pandemic to the yen's depreciation, the average wheat price will be about 50 percent higher for the April-September period than the six months from October 2020.
Poor harvests in the United States and Canada last summer led to a price spike in the global market, while the crisis in Ukraine, a major wheat exporter, added to the problem, according to the Ministry of Agriculture, Forestry and Fisheries.
Russia, the world's biggest wheat exporter, and Ukraine together account for about 30 percent of international exports, according to the U.S. Department of Agriculture.
Food companies are likely to raise prices of their products, such as bread and noodles, from around July after milling companies' wheat stocks, typically three months' worth, are depleted.
"Concern over familiar food items is spreading as their prices keep rising," Toru Nakaya, who heads JA-Zenchu, a powerful umbrella body for agricultural cooperatives across Japan, said at a press conference Wednesday. "We will ramp up our communication to raise consumers' interest in domestically produced food."
Japan's domestic demand for wheat amounts to some 5.6 million tons annually, and it imports 90 percent of it from overseas, according to the ministry, which reviews the price every six months.
To realize stable procurement, the Japanese government takes charge of the country's wheat import before selling to domestic companies.
The selling price is calculated based on the average price of wheat that the government imported in the past six months.
"We cannot avoid seeing the price to stay at high levels in the medium to long term," Masakazu Tokura, chief of the Japan Business Federation, the country's biggest business lobby also known as Keidanren, told reporters. "We will have to prepare ourselves for it."
