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TOKYO -- The nationwide average price of rice in Japan recently marked the first decline in 18 weeks following the release of government stockpiles, but an expert expects the average will not fall by a large margin as branded rice remains quite expensive.

The Ministry of Agriculture, Forestry and Fisheries announced May 12 that the average price of rice sold in supermarkets nationwide from April 28 to May 4 was 4,214 yen (around $29) per 5 kilograms, including tax. This represents an increase of 2,108 yen (roughly $14) compared to the same period last year -- roughly twofold -- but it was 19 yen less than the all-time high recorded the previous week.

Although the decrease in supermarket rice prices was slight, it marked the first decline in 18 weeks. The ministry believes that more than 30% of the sales volume consisted of affordable blended rice that includes government reserved rice. Whether the price drop will continue remains a focus going forward.

Since mid-March, the government has released a total of about 210,000 metric tons of stockpiled rice in sequence. According to the ministry, 3,018 tons, or 1.4%, had reached retailers such as supermarkets by April 13, and the quantity appearing on store shelves is thought to be gradually increasing.

Reserved rice is sold mixed with other rice and labeled as blended rice or multiple varieties. Much of the rice is apparently priced between 3,500 to 4,000 yen (approx. $24 to $27) per 5 kg, including tax.

While not all blended rice contains stockpiled rice, the ministry's analysis of the sales volume, which is tallied with price data, showed that the ratio of blended rice was 19% for the week of March 10. As reserved rice began to be released from mid-March, the ratio gradually increased, marking 24% for the week of April 7, 28% for the week of April 14, and 31% for the week of April 21. The week starting April 28 is also estimated to have seen a ratio exceeding 30%.

Of the approximately 210,000 tons released in two auctions, about 94%, or 199,000 tons, was bought by the National Federation of Agricultural Cooperative Associations (JA Zen-Noh). According to the organization, some 32%, or around 63,000 tons, had been shipped to wholesalers as of May 8. As the agriculture ministry has requested JA Zen-Noh to supply wholesalers ahead of schedule, further price reductions are anticipated with the greater distribution of affordable stockpiled rice.

Katsuhito Fuyuki, professor of agricultural market studies at Tohoku University's Graduate School of Agricultural Science, commented, "It seems that cheaper reserved rice has started to reach the retail end. On the other hand, branded rice such as Koshihikari remains at a high price, resulting in a small overall decline. The trading price of branded rice is quite high, and the overall price of rice is unlikely to fall significantly in the future."

Source : msn