Japan Food Prices Set To Soar As Government Hikes Wholesale Wheat Prices By 10%

Tyler Durden's picture

If the past three months have been any indication of what Japan has to look forward to from Abenomics, we have a feeling his tenure will be as short, if not shorter, than all of his recent (and numerous, among which he, himself) predecessors. Because while the stock market may have risen in lock step with the plunge in the Yen, what has also soared are costs. And while a very select few benefit from the transitory surge in the Nikkei, the rising costs, i.e., inflation, hit everyone equally.

Presenting this visually: the USDJPY and Nikkei correlation, which is 1:1 - this is the good news (for some)

Again, "for some":

And the flip side, as shown before, soaring energy costs - this is the bad news (for all):

As all of this happens, Japanese exports - the sole purported reason for this whole reflationary experiment, as the only way the economy improves is if Japan exports soar and the country returns to a net trade surplus status, just hit a record deficit as of a few days ago:

But while the "no free lunch" reality has until now mostly been felt by those who need energy, as shown in "You Wanted Inflation, You Got It: Japanese Gasoline Price Rises To Eight Month High" the inflationary impact on Chinese imports is about to hit everyone like a sledgehammer right where it hurts the most: in the stomach, as the inevitable has finally happened, and the agriculture ministry announced that wholesale wheat prices are set to rise by a near-record 9.7% in April, which will shortly thereafter send regular food prices soaring.

From Japan Times:

The agriculture ministry said Wednesday it will raise wholesale prices for five imported wheat varieties by an average of 9.7 percent to 54,990 yen per ton in April, the second rise since October, due to higher international market prices and the yen's depreciation.


The yen's decline triggered by the policy of the government of Prime Minister Shinzo Abe formed in December has pushed up prices 2 percent, and new prices to become effective in October might get even higher if the Japanese currency remains weak, the Ministry of Agriculture, Forestry and Fisheries said.

This is only the second highest increase in wheat prices in history, with the only greater one taking place during the great inflation scare of early 2011, when even China got its brush with the "spring" movement that toppled all North African dictators.

The rate of increase in April is the second steepest after the 18 percent notched in April 2011.

What food will be impacted? Pretty much anything with wheat in it. And anyone hoping that the deep-pockted government would sibsidize producers (and thus force the entrance into a trade war), will be disappointed: the prices will all be passed on to the consumer.

Of five main wheat varieties, two for use in udon noodles and confection will become 14.2 percent more expensive. The prices for the remaining three varieties used in bread and Chinese noodles will jump 7.5 percent, making it likely that price hikes will be passed onto consumers.


Following the ministry's announcement, Nippon Flour Mills Co. said it will consider raising its charges. Other milling firms that produce wheat for industrial and retail use are also expected to follow suit.


The government buys all imported wheat, on which Japan relies for 90 percent of its consumption, and revises the prices twice a year -- in April and October.

And just like that Japan is about to learn that soaring stock prices always have a trade off, a lesson which even GETCO's S&P ramping algos will not be exempt from when the latest bout of soaring food inflation results in central banks scrambling to withdraw liquidity, just as they did in early 2011. The results will naturally be the same.

As for how long Abe's government will remain in power after energy and food inflation sweep through the net importing nation, that is anyone's guess.

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francis_sawyer's picture

kobe horsemeat coming in 5...4...3...2...

Divided States of America's picture

Nice, a sushi boat not just more toxic now, it will cost you ten percent more to buy.

macholatte's picture


Insanity From Wikipedia, For other uses, see Insanity (disambiguation)."Insane" and "Crazy" redirect here. For Insane, see Insane (disambiguation). For Crazy, see Crazy (disambiguation).

Insanity, craziness or madness is a spectrum of behaviors characterized by certain abnormal mental or behavioral patterns. Insanity may manifest as violations of societal norms, including a person becoming a danger to themselves or others, though not all such acts are considered insanity. In modern usage insanity is most commonly encountered as an informal unscientific term denoting mental instability, or in the narrow legal context of the insanity defense. In the medical profession the term is now avoided in favor of diagnoses of specific mental disorders; the presence of delusions or hallucinations is broadly referred to as psychosis.[1] When discussing mental illness in general terms, "psychopathology" is considered a preferred descriptor.[2]


see also: Japan, Soros, Obama, Clinton, Progressives, American Sheeple, MSNBC, United Nations, Alynski

kaiserhoff's picture

It's all good.  Radiation sickness kills the appetite.  Peace, Harmony, and Happy Joy, Joy.

matrix2012's picture

Yup, just substitute all kinds of udons and noodles with rice noodles, problems solved!

Lost My Shorts's picture

Funny thing about Japan, grain products in general are the most crazy expensive relative to other countries, including rice, wheat, noodles, etc.  Rice already cost 5x what it costs in Vietnam, even before the price of fuel to grow it just went up.  Wheat flour was already something like $4 per pound in the supermarket.

But avocados and seafood are cheap compared to the USA.  Don't worry, the Japanese will survive.

XitSam's picture

I don't understand, why is the government setting the wholesale price of wheat? Are there price controls or supports?

BigInJapan's picture

Not sure about wheat but yes, the government sets the rice prices and futures trading is illegal. They tried rice futures for a day two years ago and shit the bed when the price went parabolic in a day's trading.

Jonas Parker's picture

and now the Kobe horsemeat glows in the dark too...

McMolotov's picture

Soylent Green is made of Japanese old people.

lolmao500's picture

No worries people!


Japan scientist synthesizes meat from human feces


McMolotov's picture

Bet it tastes like chicken shit.

BigInJapan's picture

You know that story is fake, right?

vote_libertarian_party's picture

Good thing everybodys paycheck is going up 10%...ohhhhhhhhh

fonzannoon's picture

they should have barry bonds and mark McGuire ring the bell when we hit the all time highs today.

ParkAveFlasher's picture

Theyll get Ryan Braun instead, because he's "clean". 

LawsofPhysics's picture

Hhmm, devalue currency (effectively decreasing wages/purchasing power) while hiking the cost of commodities essential to survival.  Shouldn't be long now.

The Heart's picture
"Shouldn't be long now."


You got that right!~

Here for entertainment purposes only.

Jim Willie: Gritty Questions on the Historic Collapse:


css1971's picture

That's just stagflation getting under way properly.

LawsofPhysics's picture

That is incorrect.  In every other stagflationary period interest rates went up.  in some cases so did wages.  Go ahead, raise rates now, I double dog dare you.  Velocity was also higher, look at it now, and finally, what was the money stock as a percent of gdp compared to now.  This time is indeed different, and not in a good way.

NoDebt's picture

Amazing with all of modern man's "advances" over the hunter-gatherer days, we still come down to the same old stuff that's put the brakes on everything for millenia- resources.  All that nicey-nice stuff like "middle-class standard of living" and "retirement" and "recreation" gets sacrificed until you're down to just the needs- eating, staying warm and protecting yourself.  Bam, right back where it all started.  Subsistence.  Just with more people on the planet.  That's progress, I guess.

nobusiness's picture

inflation = Dow 20,000  Bernacke already signed up for that program

PUD's picture

They can either eat aapl's or cash in their winnings from the casino!

akak's picture

As long as they buy chicken breasts at the same place that Orly still supposedly buys them at the same price she was paying in 1997, there is no problem here.

object_orient's picture

Her $1/lb. chicken breasts are the new "costs $5 to dig silver out of the ground." You should give her a break though. She's had a tough few days on here.

swissaustrian's picture

So Japan and the UK are the first dominoes in the hyperinflationary endgame, who's next?

ParkAveFlasher's picture

Are we including South America in this?  Because I call Bolivia, then Ecuador. 

Temporalist's picture

Argentina already has capital controls and price controls and now they are threatening default.

Disappearing Dollars Compound Default Threat: Argentina Credit



Argentine Default Threat Spurs Bond Selloff: Buenos Aires Mover



Argentina Says It Won’t Voluntarily Comply With Bond Ruling


lolmao500's picture

Japs will continue to be good little slaves and not revolt.

Japs can't revolt no matter how screwed they are by their government... the last Japanese revolt was in 1877 and SAMURAIS did the revolt... not the common people.

The last revolt by the Japanese people was in 1637... so the Japanese government is quite safe... They could raise food prices by 500% overnight and the Japs would take it up the ass without lube and ask for seconds.

Divided States of America's picture

Yup thats why at the G7 meeting, instead of grilling Japan for devaluing the Yen, all the other countries were all in agreement that Japan should be the one taking the lead in the currency wars because the japanese people wont do jack shit. China is the loser out of all this imho.

lolmao500's picture

IMO the only thing that will stop the printing is bondzilla showing up... and considering how he hasn't shown up in the last 20 years, that could take a while.

Divided States of America's picture

Well if Fuckyoushima didnt wake him up...I dont know what will.

dolph9's picture

TPTB are hoping for the same from American whites.  They know what to expect from the ghetto and expect to pay you off to keep the order when things go down.

razorthin's picture

And how will the consumer be sustained to make him sustainable?

Dr. Engali's picture

Thanks to the magic of hedonic regression there is no inflation.

I am more equal than others's picture

Hideous humongous demonic hedonics... lying as a science and because you 'feel' the need to make arbritary adjustments.

eaglerock's picture

Does Vegas have over/under betting for Egyptian/Greek/Japanese collapse?  I'm in at: 

Egypt:  next Thursday

Greece:  December

Japan:  late 2014

eaglerock's picture

Exporters not supplying diesel to the country because their not getting paid.  Bakeries are shutting down because their employees are coming at managers with swords and the government won't protect them.  Tourists afraid to visit.  I think they want to get the collapse in before the Friday prayers.  Who knows??

lolmao500's picture

because their employees are coming at managers with swords

LOL Egypt will be in trouble for sure... even with the endless protests against Mubarak Egypt didn't collapse... Egypt won't collapse and even if it did, people are used to it... Egypt is a nobody on the world stage. Now if Europe, the UK, the US, Japan or China collapses, then we are in trouble. Till then...

are we there yet's picture

Perhaps Friday they should prey to Ben Bernankie who is doing Alas work. Or Satan's work, hard to tell the difference in Syria and the middle east.

buzzsaw99's picture

I wouldn't eat anything japan-homegrown so 10% doesn't sound that bad.

davidsmith's picture

Wheat too expensive?  Then let them eat irradiated rice. At least their tummies would glow.  Hot!!

Bicycle Repairman's picture

Move from white rice to millet.  Voila.  No inflation.  Has that good old feudal feel to it as well.

As "13" said in the Seven Samurai: "What a dunghole!  I'd hate to die there!"

azzhatter's picture

Do they really need to eat?

akak's picture

I thought violent, misogynistic porn, an 80-hour work week, and an all-consuming e-gadget obsession was what really sustained the Japanese people.

Miss Expectations's picture

How many Japanese would fit in 138.8 square miles?

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