Rice prices double in Japan as key elections loom

The price of rice doubled in Japan in the 12 months to May, data showed on Friday, as an acceleration in inflation piled fresh pressure on Prime Minister Shigeru Ishiba ahead of key elections next month.

Polls for parliament’s upper house are crucial for Ishiba after public support for his administration tumbled to its lowest level since he took office in October, partly because of frustration over the cost of living.

One of the main sources of anger has been the surging cost of the food staple, which has rocketed for months owing to shortages caused by a variety of reasons including supply chain snarls.

The price of the grain rocketed 101 percent year on year in May, having jumped 98.4 percent in April and more than 92.5 percent in March.

That helped push core inflation, which excludes volatile fresh food prices, to a forecast-topping 3.7 percent – its highest level since January 2023 – and up from 3.5 percent in April.

The rice crisis has led the government to take the rare step of releasing its emergency stockpile since February, which it usually only ever did during disasters.

But rice is not the only thing pushing inflation up: electricity bills jumped 11.3 percent in May, while gas fees rose 5.4 percent, according to Friday’s data.

Excluding energy and fresh food, consumer prices rose 3.3 percent, compared with April’s 3.0 percent.

“Since I’m a temp worker, my salaries have remained stagnant for years, and I see no sign of change in the years ahead,” Chika Ohara, 52, said on a Tokyo street.

“But prices are going up nonetheless and I feel the impact.”

To help households combat the cost of living, Ishiba has pledged cash handouts of 20,000 yen for every citizen, and twice as much for children, ahead of the election.

The 68-year-old leader’s coalition was deprived of a majority in the powerful lower house in October as voters vented their anger over rising prices and political scandals.

It was the worst election result in 15 years for the Liberal Democratic Party (LDP), which has governed Japan almost continuously since 1955.

The Bank of Japan has been tightening monetary policy since last year as inflation crept up but worries about the impact of US tariffs on the world’s number four economy has forced it to take a slower approach. Economists predicted a growth slowdown ahead.

Earlier this week it kept interest rates unchanged and said it would taper its purchase of government bonds at a slower pace.

“Policy flip-flops and delayed pass-through from producers to consumers mean inflation will slow only gradually in the coming months,” said Stefan Angrick of Moody’s Analytics.

“This will keep a sustained pickup in real wages out of reach, and with it a meaningful uptick in consumption.”

Factors behind the rice shortages include an intensely hot and dry summer two years ago that damaged harvests nationwide.

Since then some traders have been hoarding rice in a bid to boost their profits down the line, experts say.

The issue was made worse by panic-buying last year prompted by a government warning about a potential “megaquake” that did not strike.

Intensifying fighting between Iran and Israel was also adding upward pressure on energy prices, posing a further risk to the Japanese economy. (AFP)