Posted: Thursday, December 20, 2012 12:00 PM
Tsunami renders soil unusable for the crop; demand up
By RICHARD SMITH
For the Capital Press
TOKYO -- The California rice industry may benefit from heightened Japanese interest in foreign rice, the new USA Rice Federation Japan director says.
Japanese interest in U.S. short-grain rice started recently, the federation's Yumi Kojima said. Before the 2011 earthquake and tsunami, local rice's high-volume production and lower prices attracted the favor of Japanese buyers and consumers.
"Now the environment is very different. There is more interest in foreign rice," Kojima said.
The earthquake and tsunami damaged the Fukushima Daiichi nuclear power plant, which has been spewing radioactive elements that have found their way into the rich agricultural region's water and soil.
Rice and vegetables in the Tohoku area, the northeastern part of Japan's main island of Honshu, as well as farther south in the prefectures of Chiba, Ibaragi and Kanagawa in the Kanto region which includes Tokyo, have tested positive for radioactive cesium.
Kojima said although radiation contamination is not a major problem for Japanese rice, it has created a feeling of needing to pay more attention to safer products.
"We don't know yet how that will affect imports," she said.
However, Japanese wholesalers bought all the rice they could get their hands on to maintain their inventory, worrying that this year's crop would not yield sufficient volumes.
The consequent drop of rice availability in the market triggered a higher demand for foreign rice, Kojima said.
In addition, the tsunami deposited a layer of salt that has left the soil unusable for rice. Recovery may take years.
Because of low demand, Japan only imported 37,000 tons of rice under the nation's unique simultaneous-buy-sell system last year.
This year, however, the government conducted three tenders and import volumes may reach the allocated 100,000-ton limit under the system, Kojima said.
The federation's Japan office recently opened. Kojima formerly worked as trade relations manager for PRAP, a Tokyo marketing firm that promoted the California Rose medium-grain rice variety, or Calrose.
Japan has imported U.S. rice on a regular basis since 1995. The federation promotes Calrose here because it does not compete with Japanese sticky short-grain rice.
At the conclusion of the Uruguay Round of global trade negotiations in 1995, Japan agreed on a quota for rice imports that now brings 682,000 tons of rice into Japan annually. U.S. product makes up about half the quota.
Imports outside the quota are effectively prohibited by the high tariff of $4.38 per kilogram, or $9.73 per pound.
Most imported rice, though, often remains in government stocks until released as food aid to developing countries, or sold to food processors.
Since 1999, Japan has allocated 100,000 tons of its annual imports to the SBS system, at a markup of up to $3.75 per kilo, or $8.33 a pound.