Japan slashes wheat prices for mills as costs decline

Japan is reducing the price of imported wheat for flour mills by 4% starting in October, marking its fifth consecutive price cut. This move is driven by falling global wheat prices and a strengthening yen. The new price will be 61,010 yen (approximately $413.66 USD) per metric ton, down from 63,570 yen (approximately $431.18 USD), reflecting the stabilization of the global wheat market.

Japan imports over 80% of its wheat, primarily from the US, Canada, and Australia. The government reviews prices twice a year, factoring in conditions such as strong harvests in North America, reduced weather risks in the US and Europe, and lower shipping costs due to weaker demand from China. The yen’s appreciation, currently at around 147.51 per dollar, further eases the burden on importers. These changes directly impact food producers’ costs and, ultimately, consumer grocery prices.

The price reduction could stabilize profits for Japan’s flour mills and food companies, potentially leading to lower prices for bread and noodles for consumers. Globally, this signals easing food inflation, which may benefit other major importers and calm commodity markets. Analysts will monitor Japanese food stocks to gauge the impact of lower input costs on their earnings.

Tags: prices, wheat, flour, Japan