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Japan to raise domestic wheat price by 5.8% from April

Japan will raise the price at which it sells imported wheat to domestic flour mills from April by an average 5.8% from the previous year to reflect higher import prices over the past six months, the farm ministry said on Tuesday.

The price rise would have been 13.1% if calculated according to the standard formula, but it was lowered to soften the burden on households suffering from higher commodity prices, the ministry said.

Still, the rise will hurt households already grappling with cost-of-living pressures amid elevated inflation for food and energy.

Japan buys five types of milling wheat from the United States, Canada and Australia through import tenders and sells to domestic millers at prices set twice a year.

The government last year held off on raising the price for the October-March period.

For the six months starting April 1, the ministry’s wheat selling price to local millers will average 76,750 yen ($575) per tonne, up from 72,530 yen the previous year.

“After considering the predictability of wheat prices, our policy of promoting domestic wheat production and burden on consumers, we have taken a measure to mitigate drastic changes to partially restrain the hike rate as a special case,” Kenichi Hirano, director of the grain trade and operation division of the ministry, told a news conference.

Global wheat prices surged last year amid fears of a shortage following Russia’s invasion of Ukraine and the yen’s plunge against the U.S. dollar.

Imports accounts for more than 80% of Japan’s total wheat demand.

“We need to reduce dependence on wheat imports and strengthen the domestic production base by switching from imported wheat to domestic wheat and rice flour,” Hirano said.
Source: Reuters (Reporting by Yuka Obayashi; editing by Jason Neely)

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