Agriculture minister Shoichi Nakagawa said Tuesday he plans to turn down applications by two commodity exchanges in Japan that want to list rice futures contracts on an experimental basis.

This will prevent Japan from resuming rice futures trading for the first time in 67 years. Such trading began in Osaka in the 18th century and was terminated in 1939.

The Tokyo Grain Exchange and Kansai Commodities Exchange have requested permission to conduct experimental three-year transactions in rice futures contracts that they say will help wholesalers hedge rice price fluctuation risks.

The commodity exchange law allows the Agriculture, Forestry and Fisheries Ministry to approve the listing of grain futures contracts unless futures trading seriously affects production and distribution of the grains in question.

The Central Union of Agricultural Cooperatives is opposed to rice futures trading, saying that it will cause “serious confusion” on the rice production front.

The ministry seems concerned that rice futures trading may have serious adverse effects on production adjustments.

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