The USDA report on the Japan tsunami’s effects upon the rice supply and agriculture are in agreement with what I surmised a few days after the event. I have highlighted a few sentences of special interest.
From the report…
Japan’s Rice Sector in Brief
• Japan is currently the 10th largest rice producing country in the world, accounting for about 2 percent of the global crop. Japan’s share of global rice consumption is also about 2 percent. Both total and per capita rice consumption in Japan are declining, mostly due to diet diversification and a decreasing population.
• Japan imports about 682,000 tons (milled basis) of rice each year, or about 2 percent of global rice trade. All imported rice is part of Japan’s minimum access requirements agreed to under the WTO. The United States typically supplies about half of Japan’s annual rice imports.
• Imports account for about 6 percent of Japan’s total rice supply. Much of the imported rice is used in processed products, as well as in feed. Tariff rates for any rice imported above the minimum access requirements are prohibitive. On balance, Japan is nearly self-sufficient in rice.
• Japan exports about 200,000 tons of rice per year as food aid, with its imported rice accounting for some of these shipments. Commercial exports are extremely small.
Little Impact on Japan’s Rice Production
• Not much rice is grown in the areas directly affected by the tsunami, which flooded areas up to 3 miles inland. Most rice in Fukushima, Miyagi, and Iwate—the most severely affected prefectures—is grown farther west. Together, these three prefectures account for almost 13 percent of Japan’s rice production. Damage to rice fields was much less in the two other affected prefectures, Ibaraki and Aomori. Although these five prefectures typically account for about 21 percent of Japan’s total rice production, preliminary analysis of satellite imagery suggests that less than 1.5 percent of Japan’s rice land was actually flooded by the tsunami.
• Rice fields in Japan are currently fallow. The 2010 harvest ended in November and the 2011 rice plantings will not begin until late-April and early May.
• There is a substantial amount of land in Japan that has been diverted from rice planting since 1969 that could be brought back into production. Current rice area is just half the 1960 record of 3.3 million hectares.
Adequate Stocks Are Available in Japan
• Although the tsunami and earthquake likely destroyed some rice in storage, there is much rice stored in other parts of the country that could compensate for damaged rice if transportation—including fuel—is available and roads and bridges are intact.
• Prior to the March 11 tsunami, USDA estimated that about 2.8 million tons (milled basis) of rice would be in stocks by the end of the 2010/11 market year on November 1, 2011. Of the projected 2.8 million tons, the Government keeps about a million tons of rice in reserve stocks. Additionally, there are almost 900,000 tons of rice that were imported under Japan’s WTO minimum access requirements.
• Overall, the ending stocks estimate indicates a comfortable 33 percent stocks-to-use ratio. The global stocks-to-use ratio for rice is around 22 percent, adequate for a major food grain. For the United States, a 12-15 percent stocks-to-use ratio typically is sufficient to maintain prices.
• The Japanese Government has a history of not importing any rice above its WTO minimum access requirements, even in years of weak production, preferring instead to draw down its stocks.
Despite these mitigating factors, the tsunami has likely adversely impacted the Japanese rice sector in several ways:
• The rice fields that were flooded will likely be unable to grow rice this year due to saltwater intrusion. Normal rainfall should flush out the salt in 1 or 2 years. However, the timing of recovery from saltwater intrusion in Japan is uncertain. In 2008, Burma was able to replant quickly after Typhoon Nargis struck in early May due to normal, beneficial monsoon rains. In contrast, Louisiana’s recoveries from saltwater intrusion (caused by Hurricanes Katrina, Rita, Gustav, and Ike) were hampered and delayed by a lack of rain.
• The damage to roads and bridges will make moving rice to critical areas difficult. This will also hinder moving inputs to farmers in affected areas.
• There may be negative impacts due to consumer safety concerns regarding rice contaminated by radiation. This may result in a premium for rice stored farther away. Consumers may also shift to other foods that are viewed to be safer or require little preparation. Consumer reaction to these concerns is still evolving.