February 23, 2012

Japan to lower wheat price for domestic users by 15%

Japan will lower the price of imported wheat sold to domestic users by 15%, compared to the previous six-month period, from April 1, bringing the price to an average JPY48,780 (US$610) per tonne, the farm ministry said on Wednesday (Feb 22).

The move is likely to cause a fall in prices of bread and other wheat products.

The fall from the current average of JPY57,720 (US$720) reflects a fall in imported wheat prices in the past six months, with ample global supply weakening Chicago wheat prices, a ministry official said.

Japan, the world's fourth-biggest wheat importer, buys five types of milling wheat from the United States, Canada and Australia through import tenders and sells to millers at prices set twice a year.

The new April-September price for each wheat type is based on a weighted average of the ministry's purchase prices in the six months to February.

The Japanese government keeps a firm grip on wheat imports to supplement locally produced wheat, the second most important grain after rice, and holds to strict quality standards to reflect demand from Japanese end-users for high-quality grain.

The government buys about 5 million tonnes of foreign wheat a year for milling use, which accounts for about 90% of domestic consumption.

For the current fiscal year ending March 31, Japan plans to buy 5.11 million tonnes of foreign milling wheat.