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Food crisis looms for Japan as prices rise

Other News Materials 2 May 2008 08:51 (UTC +04:00)

Japan is facing its first food shortages in almost 40 years, with supermarkets close to running short of stocks, IHT reported.

In the last month, the price of milk, soy sauce, bread, noodles, pasta and cooking oil have all risen as makers are forced to pass on rising costs.

Butter has already begun to disappear from supermarket shelves as surging global grain prices make it impossible for Japan's dairy farmers to increase milk production. Retailers warn that other goods could follow soon.

With the global food crisis beginning to bite in one of the world's most powerful economies, more than 80 per cent of Japanese said that increasing prices were having an impact on their household spending. Many shoppers said they were switching to cheaper brands or buying in greater bulk.

Among the most seriously affected are Japan's brewers.

"If we look at the cost of ingredients and raw materials over the last year it is clear that prices are going up," said Yoshiki Yamashita, a spokesman for Kirin.

In February, Kirin became the first of Japan's four main brewers to raise its prices. According to Mr Yamashita, this was due to the cost of its ingredients climbing to almost £35 million in 2007. In 2008, that figure is expected to exceed £48 million.

A major concern for Japan's government is that its farmers can produce only about 40 per cent of the food consumed each year by its 128 million inhabitants. This is the lowest proportion for any industrialised nation and also adds to transport costs, which have become a larger burden than elsewhere.

According to a survey last month by the Nihon Keizai Shimbun newspaper, 76 per cent of Japanese food manufacturers were considering increasing prices. The majority expect the price of wheat, soya, oilseed and other key ingredients to continue to rise during the year.

The crisis is the first of its kind to affect Japanese consumers since the oil crisis of the early 1970s.

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