Japan Rice Futures Surge 40%, Trigger Circuit Breaker On Concerns Fukushima Radiation Will Destroy Crops

Tyler Durden's picture

70 years after rice futures trading was halted on the Tokyo Grain Exchange, it was finally reopened today... only to be halted immediately. The reason: concerns that Fukushima radiation would destroy rice crops and collapse supply sent the contract price soaring from the reference price of Y13,500 to a ridiculous Y18,500 at which point it was halted. Note the tick chart below which puts any of our own stupid vacuum tube-induced HFT algos to outright shame. That said, the move should not come as a surprise at least to our readers after we predicted the day Fukushima blew up (and even before) that very soon rice prices would surge to record highs. Little by little, that realization is dawning on everyone.

More from Bloomberg:

The exchange listed rice contracts today for the first time since the start of World War II to boost flagging volumes and profit. The resumption comes as fallout from the Fukushima Dai- Ichi power plant may spread after it was found cattle had been fed cesium-tainted rice straw.

 

“People are very concerned that rice supplies may be smaller on fear of radiation contamination,” Nobuyuki Chino, chairman of the exchange’s rice futures trading committee, told reporters in Tokyo. “This was reflected in the prices,” said Chino, who is also president of Tokyo-based grain company Continental Rice Corp.

 

Commercial stockpiles of rice, a Japanese staple, may drop to the lowest level in four years in 2012, after the March earthquake and nuclear disaster curbed production, possibly spurring the government to release its reserves, according to the agriculture ministry.

 

Faced with criticism from consumer groups and opposition party politicians that lax government control has endangered food safety, the ministry has tightened rice screening before the harvest begins in eastern Japan.

 

The government ordered Fukushima and 13 nearby prefectures to test rice samples before the harvest. Authorities will ban shipments from areas where they find grains containing cesium exceeding 500 becquerels a kilogram. Rice production in Fukushima and neighboring Ibaraki, Miyagi and Iwate prefectures amounted to 1.56 million metric tons last year, out of the country’s total of 8.5 million tons.

Sadly, this development means that Thailand and Vietnam, and the rast of the major rice exporters, are suddenly going to find they have quite a bit in marginal pricing power for this core Japanese staple. It also means that food riots may be imminent if indeed, as futures indicate, the price of rice is about to jump by 40%.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Bindar Dundat's picture

Poop!  This stuff is getting serious! (Millions will die)

mophead's picture

Bitchez,

Did I not say to expect food prices to rise because of fukinshima? All these little disasters are either purposely created or hyped to drive up prices. And as I've said before, over and over, expect this shit to continue around the world. What people don't understand is that it's not that simple to create price inflation through money printing. And driving up the price of oil has its limits, especially if you live in say, California. Sometimes you just have to disrupt the supply chain of whatever it is you're trying to manipulate. In the case of food, it's not that hard, you do it through droughts, contamination, environmentalism (quotas on water), etc.

Edited: Oh, btw, if this stuff catches on, expect other crops, FAR FROM JAPAN to be affected, such as in California, Oregon. Watch and see, you heard it right here.

 

goldfish1's picture

Edited: Oh, btw, if this stuff catches on

Be specific what you mean by "this stuff".

expect other crops, FAR FROM JAPAN to be affected, such as in California, Oregon.

Specifically, what crops?

 

FEDbuster's picture

Let them eat cake (just not rice cakes).  Rice was $19. /50 lb bag at Sam's Club yesterday, guess I'll go down and buy a couple more bags for the bunker.

sullymandias's picture

Millions will die? A million is 0.015% of the world population. Sorry, you haven't scared me yet.

TruthInSunshine's picture

Totally and gratuitously OT, but if anyone sees RoboMomoFaderTrader, tell him gold called, and said "Beeeeeeeoooootch!"

Doyle Hargraves's picture

The real effect of the G7's statement on liquidity: Food riots, SHTF, Bitchez!

franzpick's picture

Since Lehman, I have accumulated in an AC'd storage unit of 1 year's food supply for 22 otherwise totally unconcerned family members; now I am realizing that I, and my prepper friends and family, when the riots start, may have to maintain an armed defense of that storage unit.

We'll be totally outnumbered and outgunned by the local gangs, and my immediate plan B is to arrange a truck transfer of the food storage items to a nearby, isolated, mountain retreat, but it looks like the 'you can run but can't hide' scenario may be developing.

AhhhItBurns's picture

Be sure to have a contingency plan for when the supplies runs out. Seed and drinkable water will play a crucial role. Seeds are also one of the things to be overlooked as soon as SHTF and the herds run with whatever they can get their hands on in the supermarket.

dolly madison's picture

I've been stocking up on small animals myself as well as seeds.  I have dwarf dairy goats, chickens and rabbits.  It's important for where I live, the high desert.  Our growing season is short.  I will need to depend more on animals.  Rabbits are a good choice.  They can be kept as pets anywhere.  They are small for travel, make meat out of eating things that you can't, and breed quickly.

However, I think we all still have some time.  The end is not here yet.  Right now, most food futures are down.

Doyle Hargraves's picture

I thought I was the only clown stuck in the High Desert. I plan to stay in place and defend, but if I have to bug out, I will creep to the Sierras via paths untraveled and remote. From that point have a predetermined safe place with supplies on hand, and am very familiar with the general area and sympathetic locals for foraging and hunting/fishing. You are right though not much of a growing season here, but some fruits and veggies are fairly easy to grow. We used to raise rabbits, chickens, and swine for food when I was younger, and may get into that business again very soon.

Thomas Jefferson's picture

I like my rice burnt.

IQ 145's picture

Put the rice and the water in the rice cooker; you don't even have to plug it in. What's the problem?

macholatte's picture

The Kiwi and Aussie are crashing.  Why?  

Any ideas?

TruthInSunshine's picture

Because their main trading partner, with whom they export massive amounts of mined products to, is crashing.

Australia and New Zealand are tied to China's fate, but if China catches a cold, they catch pneumonia.

Ahmeexnal's picture

and if China catches chlamydia....

TruthInSunshine's picture

Australia and NZ get a bunch of hairy crabs?

I'm not sure. I do know hairy crabs are a delicacy in China.

Manthong's picture

Drink enough Fosters and they are in Aus or NZ.

Throw another hairy crab on the barbie, mate?

TheFourthStooge-ing's picture

and if China catches chlamydia....

Australia and New Zealand clap?

 

macholatte's picture

Thanks. That was my thinking too and in the absence of any other news there was nothing else to speculate about.

Chinese demand for food will not change which is both Aus & NZ. Demand for materials, ore, industrial metals, etc. will, of course, deteriorate as that demand slows, which is mainly Australia.  Logically, a slow down in manufacturing should affect Aus more than NZ. However, I have heard it said that there is some kind of linkage between the Kiwi and the Aussie so they move somewhat together with the Kiwi being more fragile.

Who knows anymore with the intervention that is going on. Maybe the central banks decided to raid Aus & NZ to prop up another currency.

Pay Day Today's picture

Australia is New Zealand's major trading partner. Australia is just starting to fall off their cliff now, driven by a China slowdown and a massive private debt overload.

qussl3's picture

If this runs true to form, you aint seen anything yet.

Wait for the RBA rate cuts for some epic lulz.

gwar5's picture

Possibly, Western financial woes mean China's Western retail customers will go away, resulting in less demand for those Aussie resources. Tyler mentioned slowdown in China tonight. Am not sure if Kiwi moves in sympathy with the AUD. Maybe retail is buying gold downunder now too.

Agree seems we're missing the usual lag time. Of course, there's always the fear of holding any fiat. No other ideas, unless there is an unknown unknown.

astartes09's picture

This is why China cant be a super power.

DoChenRollingBearing's picture

SJGR yet again. Poor Japan.

DoChenRollingBearing's picture

"Shit Just Got Real"

ALL of abovd above contribute to SJGR...

President Palin's picture

This is sad.  People will starve.  Glow in the dark rice is no fun to eat.

Thomas Jefferson's picture

Maybe they can import some of the Chinese rice made of plastic.

SYantiss's picture

And lead... Mmmm... Lead...

user2011's picture

Why do you need rice when you are powered by radiation dust ?

zorba THE GREEK's picture

Maybe they should do like Mexicans and eat corn products.

Mec-sick-o's picture

They will lose their favorite spirit & staple.

urbanelf's picture

My nerves are going.  I am going to snap very soon.

zorba THE GREEK's picture

Calm down, this is just transitory.

gwar5's picture

That really sucks for them. I still feel bad for Japan. Thinking their ground water is going to be contaminated too. There'll be no end to it for them. 

NuckingFuts's picture

Good luck and God bless. We are in it now, see you on the other side.

I am Nucking Futs and I support this message.

user2011's picture

It take them 4 months to realize that ?    Also, last week, they had flash flood in two rice producing prefectures.  What take them so long to figure it out ?

Doña K's picture

Don't panic. Rice is a few times more expensive in Japan than elsewhere. Yes it's silky and tastier, but so what? South Korea will be more than happy to sell as much as they want. With the YEN/DOLLAR at 87, they can even buy 1/4 of Korea.

Mugatu's picture

Fried Rice! Pretty soon "100% RAD Free" labels will show up at the supermarkets as a selling point. 

Hansel's picture

Been taking crazy pills again Mugatu?  :|

caerus's picture

Have you ever wondered if there was more to life, other than being really, really, ridiculously good looking?

IQ 145's picture

No, I never did. Is there?

Mugatu's picture

Ahhhh!  Your talking loco and I like it!

Life of Illusion's picture

 

 

Japanese don’t like Thai/Vietnam rice. Furthermore they will not grow/allow GMO rice in their country.

I bet they would love to purchase some USA GMO non cesium rice with that strong yen today.

 

Jack Napier's picture

What's this got to do with the price of rice in China?

Caviar Emptor's picture

Let them eat liquidity!