The latest cut in the U.S. forecast for corn and soybean output this year may eventually affect Japanese consumers, who are heavily dependent on crops from the United States.
The U.S. Department of Agriculture slashed its estimate for corn and soybean production Friday due to a deepening drought affecting large sections of the country.
Continuing high prices may result in price hikes for basic groceries in Japan, as imports of the crops are used for a wide range of products, including mixed feed, cooking oil and tofu.
Japan is the world’s biggest importer of corn, purchasing some 15 million tons a year. Most of its domestically consumed corn comes from abroad, with some 80 percent of the total used for mixed feeds for livestock.
As feed accounts for some half of the entire production cost of cattle farmers, rising corn prices may be reflected in prices for meat and dairy products.
Cornstarch, used for starch syrup and glucose sugar, is also employed in making beer. Rising corn prices are expected to affect breweries, although companies say they will deal with the expected increases by reducing other costs.
As for soybeans, Japan imports some 2.8 million tons annually, mostly for food oil production. The prices of cooking oil may be pushed up if soybean prices continue to soar.
One major cooking oil maker has already raised its prices twice this year.