Japan's 2004 rice harvest index worsens to 'slightly poor'

Japan's rice harvest index for 2004 worsened to a "slightly poor" reading as of Oct. 15 from "average" as of Sept. 10 due to landings of typhoons in the one-month period that disrupted rice harvest in Kyushu and other areas, the farm ministry said Tuesday.

The Ministry of Agriculture, Forestry and Fisheries said the nationwide average of rice harvest indexes stood at 98 as of Oct. 15 against a base of 100 for an average year, down from 101 marked as of Sept. 10.

The ministry had set the "average" reading in September because of high temperatures and sunny weather since June, but it lowered the index by 3 points considering damage to rice plants brought by the typhoons.

The farm ministry originally planned to implement measures to cope with excessive rice harvest this year, separately shipping rice for livestock feed, but decided to cancel the plan as the index deteriorated.

In 2003, the rice harvest index stood at an "extremely poor" reading of 90, the worst in 10 years, due to unseasonably low temperatures and lack of sunlight in the summer.

The rice harvest index will be finalized between late November and early December. The indexes stood at 101 in 2002 and 103 in 2001.

Japan Will Likely See An Average Rice Harvest This Year

Japan will likely see an average rice harvest this year, with the nationwide index for the crop coming to 101 based on Agriculture Ministry surveys as of Sept. 10, The Nihon Keizai Shimbun learned Tuesday.

Retail rice prices have already been moving at a low level on the harvest news and are expected to trend downward for the time being.

After the ministry announced the results of its Aug. 15 surveys, the index was expected to hit 102 or higher, indicating a good harvest. But a series of typhoons and other unfavorable climate conditions reduced crops in the Tohoku and other regions to lower-than-anticipated levels, pushing down the national index.

Last year's domestic rice harvest was the poorest in 10 years, with the index falling to 90.

The ministry will announce the results of the September surveys on Wednesday.

Researchers from the National Institute for Agro-Environmental Sciences in Tsukuba, Ibaraki Prefecture, project that while harvests will increase in colder regions such as Hokkaido, the national average will fall by 10 percent.

If cultivation methods remain unchanged, the warmer regions of Chugoku and Shikoku in western Japan and Kyushu in the southwest will see a rice crop decrease of 15 to 18 percent, the group forecasts. The quality of rice may also decline as warmer temperatures shorten the time for rice to ripen.

Japan produces about 10 million tons of rice a year, according to data from the Ministry of Agriculture, Forestry and Fisheries.

"It might be difficult for Japan to secure its food supply in the future," said Isamu Noguchi, head of the institute's meteorological research group.

In order to sustain cultivation of the Japonica short-grained rice, the staple food in Japan, either a new variety that is resistant to high temperatures will have to be developed or farmers would have to adjust the rice planting season, Noguchi said.

The predictions are based on forecasts that temperatures in Japan will rise by 3.3 C to 3.8 C in 100 years from the average for 1990.

Noguchi and his group reported the findings in a meeting in Tsukuba on Wednesday with other environmental research organizations.

Bumper Rice Crop Predicted In Japan

The government has released projections for this year's rice harvest and the news is good. The rice harvest is expected to be good this year in sharp contrast to last year's crop, the poorest in a decade, thanks to the high temperature and ample hours of sunlight especially in western Japan, the Agriculture, Forestry and Fisheries Ministry said Wednesday.

According to the projections as of Aug. 15, the rice harvest is expected to be "good" in Oita and three other prefectures, while 35 prefectures will enjoy "fairly good" crops.

Among the 19 prefectures mainly in eastern Japan, which occupy about 70 percent of the nation's rice-field acreage, six prefectures along the Sea of Japan recently hit by torrential rain, including Niigata and Fukui prefectures, will have "an average year," the ministry said. Rice will be harvested soon in the 19 prefectures.

Meanwhile, 26 out of 27 prefectures mainly in western Japan, where rice is harvested later than the 19 prefectures, are expected to enjoy "good" or "fairly good" rice harvests. Tokushima Prefecture, which was affected by Typhoon No. 10, will have "an average year."

The ministry said Okinawa Prefecture, where the rice harvest is expected to be completed by the end of the month, will be the only prefecture whose rice harvest will be worse than average due to a water shortage.
"The rice crop for this year will be as good as the abundant crop in 2001 as long as nothing happens later this year to affect the crop," the ministry said.

WTO Likely To Spare Rice From Big Tariff Cuts

Much to the relief of the Japanese government and farmers,rice is likely to be excluded from a list of products to face big tariff reductions in the new round of World Trade Organization agricultural product trade talks, which began Wednesday in Geneva, the Nihon Keizai Shimbun reported Thursday.

Japan is teaming up with other major farm product importers, such as Switzerland, to demand that circumstances in their nations be taken into consideration so that agricultural industries in these countries can survive.

So far, such nations as Brazil and India have shown flexibility on the issue,a view echoed by European Union Trade Commissioner Pascal Lamy on certain key products, such as rice.

Although the U.S. position on the issue remains unclear, "we don't expect a change in how major items are treated," according to a Japanese Agriculture Ministry official.

Even if rice continues to be exempt from substantial reductions in tariffs,Japan is still likely to come under pressure to cut them to some extent and to increase its rice imports.

But Japan, which currently must purchase 770,000 tons of rice a year from overseas, already has 1.2 million tons in reserves. An increase in purchases could cause the nation's expenses for additional storage to balloon, hurting finances.

And in exchange for ongoing protection for rice, WTO members could pressure Japan to sharply lower its duties on other agricultural products.

High-tariff products, such as butter, would be hit hard in Japan if a larger number of imports are allowed. Beef and pork producers, already under pressure from overseas, could also face increased competition.

The Agriculture Ministry plans to work on reforms starting this year in a bid to improve the international competitiveness of Japanese agriculture.

Rice Prices Fall As Wholesalers Unload Inventories

The upsurge in retail rice prices, which was triggered by poor harvests last year due to the unusually cold winter, has substantially moderated.

Wholesalers have begun unloading growing inventories caused by the trend among consumers to hold back on purchases amid soaring prices, industry sources said, according to the report.

Akita Komachi rice produced in northern Japan's Akita Prefecture now mostly retails for Y2,400 to Y2,700 (including consumption tax) per 5 kilograms, down 20%-30% from the price levels seen in January, at supermarkets in the greater Tokyo area.

The top-end Koshihikari rice also sells for less than Y3,000 per 5kg, down from about Y3,500, a price it carried for a time, the report said.

With prices declining, some supermarket operators have resumed discount rice sales to attract consumers, offering Hitomebore rice produced in the Tohoku region of northern Japan for around Y2,100, the price level posted before the steep climb started.

An official at a major supermarket in Tokyo said, "The volume of overall rice sales is running 10% to 20%above that at the time rice prices started a sharp
rise."

Last year's poor rice crops drove up wholesale prices to the highest level in 10 years, causing more consumers to refrain from buying rice.

Given the situation, the government released part of its rice reserves, which further boosted inventories at wholesalers to more than 100% above normal levels.

According to data released by the Ministry of Agriculture, Forestry and fisheries, the volume of rice sales in the first four months of this year fell 22% from a year earlier to 1,067 thousands tons.

Not only wholesalers, but also agricultural cooperatives, are selling rice they bought at high prices at lower prices.