Rice market turned upside down by radiation fears

October 6th, 2011 by Philip Brasor & Masako Tsubuku

Japan’s rice harvest season started at the end of August, and is presently centered on the Tohoku region; or, at least it would be centered there if so much of the crop hadn’t been neutralized by the Mar. 11 tsunami and then what was left wasn’t contaminated by fallout from the stricken Fukushima No. 1 nuclear reactor. Japanese people prize rice grown in the northeastern part of the country more than rice grown anywhere else, and they prefer new rice (shinmai), the newer the better. This is a cultural thing, since in some countries — India and Italy, for instance — older rice is considered something of a delicacy.

What's new? Shinmai from Chiba Prefecture

The earthquake and tsunami hit at around the time of planting, which means a lot of rice didn’t make it into the ground and that which did may have been irradiated. Supposedly, the government checked much of the rice grown in the region when it was immature and decided it was safe, but a lot of people are far from being reassured by such announcements. On Sept. 23, for instance, the government of Fukushima Prefecture said it detected cesium above allowable levels in rice from Nihonmatsu. With more rain and the resultant seepage into soil, the numbers are always changing. Beef from the region became suspect after it was found that the cattle may have eaten irradiated rice straw. All of this has become a familiar pattern: The authorities say there’s no problem only to reveal later something that seems to indicate there is a problem. People react accordingly.

Consequently, the market for rice has been knocked on its head. New rice from the Tohoku region, usually flying off shelves at this time of the year, is being avoided, while old rice from last year’s stocks are in high demand. According to the Mainichi Shimbun, 6 kilograms of 2010 Akita Komachi, a highly valued strain, was selling for ¥12,000 wholesale last January. Now, the same rice from the same harvest is going for ¥20,000. That’s never happened before. Last week, we received a postcard from the consumer food cooperative Daichi saying that they no longer had any 2010 rice in stock. This situation has revived the rice trade, wherein rice futures are traded like stocks, something that hasn’t taken place since before the war when the government started overseeing rice distribution. Moreover, since so many wholesalers sell blends of rice from different regions but don’t necessarily specify which regions on the packaging, people are avoiding cheaper blends that may, in fact, contain no rice from Fukushima Prefecture or even the Tohoku Region. People are even demanding rice grown in the western part of Japan, which is usually scorned as being less flavorful. Normally it isn’t even sold in eastern Japan.

This may be good news for foreign rice, which is only imported because of world trade obligations. Most imported rice is used for processed foods or simply ends up gathering mold in warehouses. What may be gathering mold in warehouses a year from now is rice from the 2011 harvest, which is expected to be a record surplus. According to Bloomberg, this year’s harvest will be in excess of 10 million tons. As of the end of June, there was 3.24 million tons in storage left over from last year’s harvest, most of which will probably be gone before long.

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