Japan's Rice Shortage: Weather, Tourism, and Policy Impacts

Japan is experiencing its worst rice shortage in decades, fueled by adverse weather, increased tourist demand, and restrictive policies. Summer 2024 witnessed empty supermarket shelves as demand outpaced production for three consecutive years, depleting stocks to 20-year lows. Consumers stockpiled rice in anticipation of typhoons and earthquakes. By August, white rice was frequently out of stock, and prices soared to 16,133 yen per 60kg, a 5% increase since January.

Private rice inventories reached 1.56 million tons in June, the lowest in years. Tourists, particularly sushi enthusiasts, doubled rice consumption from 19,000 to 51,000 tons. Despite this, tourist demand remains insignificant compared to domestic consumption of over 7 million tons. Japan welcomed a record 17.8 million visitors in the first half of the year, including 3.3 million in July alone.

Aging farmers and a lack of young recruits have reduced production. Last year's heatwaves and drought further compromised harvests. Japan's rice policies, including a 778% tariff on imports, isolate its market. While it imports 682,000 tons annually under WTO obligations, this rice is primarily for processing and feed, not direct consumption. Exports have surged sixfold since 2014 to nearly 30,000 tons.

Higher rice prices contributed to Japan's 2.8% inflation in August, driven by energy and food costs. Rice and chocolate were major factors in rising food prices.