Japan to Raise Milling Wheat Prices 12% From October on Global Pressures
Japan will hike government-set wheat prices by 12% from October, citing global costs, a weaker yen and freight disruptions.
Japan's agriculture ministry announced on Wednesday that it will increase the price of imported wheat sold to domestic flour mills by an average of 12% starting October 1. This marks the second consecutive semi-annual rise in the government-administered price.
The ministry sets prices for five types of milling wheat imported from the United States, Canada and Australia through state-run tenders, reviewing them twice a year. For the six-month period beginning October, the average selling price to millers will be 70,020 yen (about $455) per metric ton, up from 62,520 yen in the previous half-year.
A ministry official attributed the hike to several compounding factors: higher international wheat prices driven by U.S. weather concerns, disruptions to Ukraine's Black Sea exports following Russian attacks, and a weaker yen. Over the past six months, the yen averaged 160.9 per dollar, compared with 155 in the preceding period.
Freight costs have also climbed, the official said, as the prolonged Middle East conflict has disrupted shipping through the Strait of Hormuz and pushed up fuel prices.
Imports account for more than 80% of Japan's total wheat consumption, making the country highly sensitive to global market movements and currency fluctuations.