Japan revived rice futures trade yesterday after 72 years, and saw prices rise sharply on growing worries over the impact of nuclear radiation and heavy rains on the harvest of its staple food.
Concerns have grown over the safety of the rice crop after the March 11 earthquake and tsunami and the nuclear crisis at the Fukushima power plant that spread radiation over a large swathe of northern and eastern Japan.
Excessive levels of radiation have been found in beef, vegetables, tea, milk, seafood and water.
But Japan was unlikely to step up imports of rice due tosufficient supply and stiff opposition from the powerful agriculture cooperatives, analysts said.
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Japan, which produced about 8.3 million tonnes of rice last year for food consumption, mostly consumes its own produce. It imports only a small amount to meet quotas agreed in international trade talks.
"I don't think importing rice is an option to resolve the current issues as the government has enough stocks," said Yoshihiro Hayashi, a professor at the Tokyo University of Agriculture. "Its supply estimate for new crops excluding Fukushima-affected planting acreage is largely balanced with demand," he said.
On the Tokyo Grain Exchange, one of two markets to launch rice futures on Monday, no trades were completed as circuit breakers were triggered throughout the session.
Buy and sell orders were last placed at 18,500 yen per 60 kg for the most active January contract, nearly 40 per cent above the exchange's pre-trade reference price of 13,500 yen.
On the smaller Kansai Commodities Exchange, which had its reference price of 13,700 yen per 60 kg but no pre-set limit for a debut price, the most active January contract first traded at 19,210 yen.
"I guess behind lies speculative players concerned about the impact on consumers of the planned rice tests," said Yoshiro Takahashi, president of Tokyo-based research firm Rice Databank Co.
More than a dozen regional governments in Japan will conduct tests to determine whether locally grown rice contains too much radioactive caesium, farm ministry officials said last week. Chiba prefecture, north of Tokyo, will be among the first to announce test results, as early as this week.
Still, Kansai's January contract closed on Monday at 18,910 yen, down by the daily 300 yen fluctuation limit from the first trade, suggesting the initial market was somewhat overbought.
"Demand for old crops which are free from radiation would be stable. But the new crop's January contract seems just overblown," a trader at a commodity brokerage said.