Japan went from a rice scarcity to a rice surplus in two years, attributable to drought, tourism and the U.S.
In 2023, excessive warmth and drought broken Japan’s rice crop, and a yr later, that harm became a nationwide scarcity so extreme, it compelled a authorities minister to resign. By 2026, Japan had swung to this point in the other way that it was sitting on a document surplus, forcing the federal government to purchase rice again off the market to maintain costs from collapsing additional. It’s nonetheless a surprise to the individuals who examine it: how on earth did Japan go from scarcity to surplus in two years?
“Every professional is definitely shocked by this fluctuation,” Ryosuke Inoue, a visiting fellow on the CSIS Japan Chair in Washington, D.C., advised Fortune. Inoue, an professional in Japanese agricultural coverage, stated even he didn’t see the size of the swing coming. “The supply-demand hole was there, but it surely’s not such an enormous hole. It might occur, and it might occur additionally within the United States. But within the U.S., the value fluctuation isn’t so excessive.”
Let’s begin with the scarcity, which appears fairly straightforward to grasp. (The reply goes to be local weather change, which, in spite of everything, was additionally partially the answer for the incoming Parmigiano and Moroccan sardine shortage we’re inevitably going to expertise.) Heat and drought in 2023 broken rice throughout the grain-filling stage, reducing the quantity that was deemed as sellable, top-grade rice. Simultaneously, a tourism increase and a few panic shopping for after an earthquake warning led to elevated demand.
Ryosuke Inoue, Visiting Fellow at CSIS
As a end result, personal rice shares fell from the traditional vary of about 2 million tons right down to roughly 1.5 million tons, and the ensuing scarcity despatched a five-kilogram bag of rice from about ¥2,000 ($13) in early 2024 to a peak of ¥4,300 ($27) by 2025, learn Inoue’s information. That yr, the federal government launched its emergency rice reserves for the primary time for the reason that reserve system was created in 1995, one thing that was usually saved for pure disasters.
“There was an argument,” Inoue stated, over how lengthy the federal government waited. “People stated the federal government ought to have launched the rice rather more shortly.”
What occurred subsequent is the half that truly shocked the specialists. Farmers, chasing the upper costs, ramped up manufacturing exhausting. Supply overshot demand so utterly that personal shares climbed from that 2024 low again as much as 2.43 million tons by mid-2026, and the agriculture ministry is now forecasting the excess will develop even bigger heading into 2027. Prices have already fallen again towards ¥3,300 ($21) and, by Inoue’s estimate, might preserve sliding towards 2022 and 2023 ranges or decrease. This month, the federal government moved to purchase again 210,000 tons of rice simply to refill the reserves it had drained the yr earlier than.
Supply inventory shock
“Your intuition is right,” Inoue stated when requested if Japan’s rice inventory lacked a buffer. Part of the rationale, he argued, isn’t solely the climate, however that Japan’s rice distribution system is genuinely opaque, even to the individuals who regulate it.
“Many distributors try to maximise their revenue, and even the federal government doesn’t know the way the rice was distributed from the farmers to the ultimate customers,” Inoue stated. At the second costs had been spiking, he stated, regulators didn’t truly perceive the construction of their very own rice market effectively sufficient to reply shortly.
Ryosuke Inoue, Visiting Fellow at CSIS
Japan grows practically all of the rice it eats and exports nearly none of it. In June 2025, in the midst of the worst home scarcity in a long time, President Trump complained that Japan “gained’t take our rice, and yet they have a massive rice shortage.” Japan already imported rice from the U.S. below a WTO-mandated duty-free quota of 770,000 tons a yr, and roughly half of it was traditionally sourced from the U.S. However, the scarcity occurred to reach proper as rice grew to become a real flashpoint in commerce talks between the 2 nations.
A 2025 U.S.-Japan commerce deal that summer season pushed Japan to spice up its U.S. rice purchases by 75%, and Inoue confirmed that improve remains to be working its manner via the system. “This development will proceed in 2026 and additional,” he stated. A rustic whose complete home rice-price debate is about defending its personal farmers ended up leaning tougher on American imports precisely when its personal scarcity made that leverage level politically unavoidable.
Ryosuke Inoue, Visiting Fellow at CSIS
But wait, there’s extra. Japan’s rice farms are staffed nearly fully by an growing older workforce. The common Japanese rice farmer is 67.7 years previous, and simply 1.2% are below 30. Compare Japan to California, for instance, which is without doubt one of the largest rice-producing areas within the U.S. The state has solely about 1,100 rice farms working with roughly 512,000 acres, whereas Japan has some 500,000 rice farms unfold throughout 3.4 million acres, which means the typical Japanese rice farm is a small fraction of the scale of its Californian counterpart.
Inoue stated the shrinking variety of farmers isn’t a problem as a lot as what occurs to the land they depart behind. “The drawback is the way to take over the land that was cultivated by them,” he stated, since a lot of Japan’s rice farming occurs in mountainous terrain that isn’t enticing to new operators. Once deserted, he stated, that land is extraordinarily tough to carry again into manufacturing.
Inoue has proposed a repair modeled on the U.S. Price Loss Coverage program, which might pay farmers solely when costs fall under a degree protecting their manufacturing prices, which he pegs at round ¥2,800 ($18) per 5 kilograms. Japan tried an analogous coverage as soon as earlier than, in 2011, however deserted it below a change in authorities earlier than costs ever moved sufficient to set off it. “I believe now’s the time,” Inoue stated. He argued letting the market function freely with a security web as a substitute of manufacturing caps would serve farmers and customers higher than the present system’s boom-and-bust cycle.
Ryosuke Inoue, Visiting Fellow at CSIS
Climate change means the shocks testing that system aren’t going away. This yr’s drought throughout western Japan, with some meteorologists evaluating it to the nation’s worst drought in additional than 30 years, is already being tied to yield declines in official information.
Inoue stated Japan’s summer season temperatures have climbed effectively above their long-term development line in 2023 via 2025, pushing farmers towards heat-tolerant rice varieties whose adoption fee has been steadily climbing, although it stays below 20% of complete plantings.
