Featured News

This surprising change in Japan's protectionist approach comes as imports from South Korea and the US grow, domestic stockpiles dwindle and prices soar

Japan is importing rice from South Korea for the first time in over 25 years, highlighting a critical challenge for its manufacturing supply chains as domestic shortages impact availability and spike consumer prices.

For a nation known for its tight control over rice imports and a populace traditionally wary of foreign grain, this development signals a shift in trade dynamics, affecting food production and consumption habits.

Last month marked the start of South Korean rice arrivals in Japan, the first since 1999, with an initial import batch of two tonnes. According to public broadcaster NHK, another 20 tonnes are expected soon.

Although the volume is minimal, this choice indicates increasing demand while domestic prices continue to climb, despite governmental interventions.

The average price for a 5kg bag of rice surged to ¥4,214 (US$30) in early April - more than double the previous year’s price during the same period.

This price escalation started with subpar harvests in 2023 due to severe summer heat, followed by consumer panic over typhoon and earthquake alerts. These factors rapidly dwindled national reserves and caused retailers to set purchase limits.

In response, the government released 210,000 tonnes from its rice reserves in March, a measure typically reserved for natural disasters or harvest failures.

The current problem, however, isn't about poor harvests but rather distribution challenges. By the end of March, logistical hurdles meant only 426 tonnes (merely 0.3%) reached supermarket shelves.

The Ministry of Agriculture cited a lack of delivery vehicles and lengthy grain preparation processes as the primary causes.

Japan's major hurdle in ensuring food supply lies in the supply chain bottlenecks, rather than just poor crop yields.

Adaptations in sourcing: Manufacturing impacts

Imported rice is becoming more acceptable even for strict Japanese consumers, with some restaurants already transitioning to American rice last year in response to rising domestic prices. Although the cost of Californian rice has doubled, it remains more economical than local varieties.

Despite increasing demand, local farmers struggle to boost production. Government policies designed to limit production for price stabilisation see many fields used for rice meant for processed foods or animal feeds. Such subsidies have long influenced Japan's agricultural production strategy.

For example, Mori Michihiro, a farmer in Kushima City, Miyazaki Prefecture, once allocated 10% of his land for non-table rice. Now focusing solely on table rice, he notes that high fuel and equipment costs leave profit margins thin.

This limitation in production capacity is part of what Kazuhito Yamashita at the Canon Institute for Global Studies sees as contributing to this crisis.

"The demand for imported rice is very high and even customers who have never bought it before are asking about it," states Ryo Asakawa from Kanematsu’s Grain Department, which imported 10,000 tonnes of Calrose in February.

"We have enquiries every day. As long as there is demand from our customers, we will continue to supply it."

Enhancing supply chain resilience in manufacturing

Japan’s rice supply chain constraints relate to a mix of weather-related crop failures, increasing costs, and disrupted distribution channels. To enhance resilience, manufacturing requires comprehensive structural reforms.

One solution lies in bolstering supply chain transparency. Implementing digital record-keeping and blockchain technologies allows for rice tracking from field to retailer. This system illuminates bottlenecks or contamination issues, supporting improved stock management and real-time monitoring, ultimately expediting rice from warehouses to shelves.

Collaboration among government entities, distributors, cooperatives, and private companies is key to swift responses during disruptions. Leveraging expertise from technology firms and researchers assures adaptability within the system.

As Japan considers future strategies, a resilient supply chain ensures better food security and stabilises prices of essential staples in manufacturing processes.

Source : manufacturingdigital