Price of imported wheat to jump 5.8% amid rising inflation

Jiji Press

8:00 JST, March 16, 2023

TOKYO (Jiji Press) — The government said Tuesday that it will raise the price of imported wheat it sells to milling companies by a smaller-than-expected 5.8%, to ¥76,750 per ton next month, as officials are seeking to mitigate the impact of rising inflation on households.

The government had been expected to raise the wheat price by 13.1% to ¥82,060 per ton due to the fallout of Russia’s invasion of Ukraine.

Despite the government’s effort, the price of imported wheat will hit its highest level since the current pricing system started in 2007.

Millers are set to increase their flour prices from about three months after the wheat price is raised, which will later sway the prices of bread and noodles.

The retail price of bread is expected to be raised by ¥1.1 per loaf from January, and that of ramen is also likely to go up by ¥1.1 per bowl, according to the agriculture ministry.

“We need to promote a shift from imported wheat to domestic wheat or rice flour, and expand rice consumption,” agriculture minister Tetsuro Nomura told a press conference.

Japan relies on imports for about 90% of its wheat supply. The government buys foreign wheat for sale to millers.

The wheat price is usually revised every April and October, based on average purchase prices for foreign wheat in the previous six months.

The government kept the wheat price unchanged last October to tackle higher inflation and planned to set the April 2023 price based on average purchase prices over the previous year.

But the latest revision was based on the average prices of the past six months as the government excluded the period of high prices immediately following Russia’s invasion to avoid heavy burdens for consumers.