Japanese rice dealers eye Chinese market as domestic consumption drops

Japanese rice dealers are stepping up efforts to export high-priced, high-quality rice to China as the domestic market shrinks, although concerns linger over the impact of deteriorating US-China relations on Japan.

The dealers who were from Japan Agricultural Cooperatives (JAC) and wholesalers are tying up with Chinese companies.

Zen-Noh International Corp, a Tokyo-based subsidiary of JAC, said it will supply rice grown in Niigata Prefecture for Chinese food giant COFCO.

While the first batch of supply is only 48 tons, Zen-Nohexpects the tie-up with COFCO as a chance to have Chinese customers pick up Japanese rice.

Major Tokyo-based wholesaler Kitoku Shinryo Co is now considering offering products at Chinese e-commerce platform Tmall, run by the Alibaba group. It started exporting rice to China in 2016 and has seen sales growth for products suitable as Chinese New Year gifts.

However, prices need to be reduced for Japanese rice to be affordable in overseas markets.

Japanese rice costs twice to thrice more than those grown in China or the US with export costs making it even more expensive in overseas markets.

China's 140 million tons of annual rice consumption is around 20 times more than Japan's, where consumption is dropping by about 100,000 tons each year mainly due to a decreasing number of children and changes in eating habits.

Japan aims to increase rice export value to China fivefold from the 2019 level to 1.9 billion yen in 2025.

However, continued tension between China and the US, a key ally for Japan, could worsen its relations with China prevent such a goal to succeed.

A Kitoku Shinryo official said that "the pace of rice exports may slow" if Chinese customers boycott Japanese products.