Future Rice Prices Remain Uncertain; Influence of Factors Like Weather, Government Buybacks Yet to Be Seen

By Ryuji Hashimoto and Haruna Fukushima / Yomiuri Shimbun Staff Writers

16:56 JST, July 26, 2025

Two months have passed since the government began discretionary contracts with various retailers to release its rice stockpiles into the market. Yet uncertainty remains about the future of rice prices in Japan.

At one point, average prices surged to greater than ¥4,200 for a five-kilogram pack, but they have fallen by about 20% as the shortage of rice has eased.

Newly harvested rice will begin to reach the retail market this autumn, but prices for brand-name rice have remained at high levels, casting doubt on whether rice prices will continue to decrease going forward.

Above ¥3,500

On Thursday afternoon at Akidai Sekimachi Honten, a supermarket in Nerima Ward, Tokyo, about 20 five-kilogram packs of rice were on display, each marked with the phrase “domestically produced rice” and priced at ¥1,990 before tax.

The packs contained old-harvest rice, produced in 2022 and kept in government stockpiles until being released under a discretionary contract this year.

A 51-year-old company employee who purchased one of the packs delightedly.

“Rice has finally become inexpensive enough for me to buy. I have a family of four and we go through rice pretty quickly, so I’m grateful,” he said.

According to the Agriculture, Forestry and Fisheries Ministry, the average retail price for a five-kilogram pack of rice at a supermarket surged to ¥4,285 in May of this year, more than double what it was at the same time in 2024.

But full-fledged sales of government stockpiled rice under discretionary contracts began in June, and the average price has fallen to a little over ¥3,500 this month, marking the first decrease in about half a year.

560,000 tons more

Rice newly harvested this year is planned to begin coming on the market in autumn. The total volume of rice harvested in 2025 is predicted to be 560,000 tons greater than that of 2024. This is partly because many farmers who previously grew grains for purposes such as food processing switched to staple food production as rice prices spiked.

The increase in production volume will likely be the largest since 2004, when the government began tracking this information. The total acreage of farmland being used for rice cultivation will also be at its highest point in five years.

In addition to the production increase, if up to 810,000 tons of government stockpiled rice released through bidding and other channels circulates through the market, it will create a surplus which could drive prices down.

“When market conditions settle down, the government will buy back an amount of rice equal to what was released from the stockpiles,” said Agriculture, Forestry and Fisheries Minister Shinjiro Koizumi.

But if the government buys all of the rice back too quickly, it could put pressure on the supply and demand conditions of the market. It now faces the question of when and how much to buy back.

Advance payments rising

However, there remains significant doubt over whether rice prices will actually fall going forward.

This is partly because local agricultural cooperatives belonging to the JA group have offered higher advanced payment to farmers across the nation.

In Niigata Prefecture, one of the nation’s most important rice production areas, JA Zen-noh Niigata informed rice farmers that its minimum advanced payment amount per 60 kilograms of Koshihikari brand rice harvested this year would be ¥6,000 greater than what it offered last year.

In the Kyushu region, where early rice crops are grown, one JA cooperative raised its offer by about ¥8,000.

Restaurant operators and non-JA grain collection companies, among others, are also rushing to buy this year’s rice harvest. An official of the JA group said, “We won’t be able to collect much rice if we don’t raise our prices.”

Average prices have been brought down by the release of government stocks, but prices of brand-name rice varieties still remain high, at above ¥4,000 per five kilograms. If grain-collecting companies raise their purchase prices, it is inevitable that retail prices will also rise.

If production volumes fail to meet current estimates due to this year’s extremely hot weather, rice prices are likely to be driven up even further.

“For the time being, the race to buy up newly harvested rice from production areas will continue, and rice prices will remain quite high, even after the new crop hits the market,” said Prof. Katsumi Arahata of Japan International University. “It may take several years for rice prices to be stabilized.”