The government is worried it won't be able to fulfill its 100,000-ton "minimum access' quota for buying imported rice because domestic rice is getting cheaper and eroding demand, sources said Sunday.
Japan is bound by an international agreement to purchase a certain amount of imported rice each year. But it is being squeezed by two trends: higher prices for imported rice being driven by rising demand in China, and falling prices for domestic rice being caused by the ongoing shift to Western diets.
A decade ago, imported rice used to cost four to five times more than domestic rice, but that has since declined to a more affordable ratio of less than double.
The increasing price competition at home may force the government to revise its policy by lowering the high tariffs it imposes on rice imports, analysts said. This could affect future talks on trade liberalization, including Japan's possible participation in the Trans-Pacific Partnership Agreement, they said.