The National Federation of Agricultural Cooperative Associations, or Zen-Noh, will open a store in a Chinese city to sell such products as milled rice and onigiri rice balls, with more locations to come later. This Japanese farming cooperatives plans to start selling rice directly in China this fiscal year, seeking to cut out the layers of middlemen that have sent retail prices through the roof. The group is in talks to set up a joint venture with a Japanese company for this purpose. Zen-Noh is the sole exporter of Japanese rice to China. China consumes 20 times more rice than Japan and imports 5 million tons a year, much of it from countries such as Thailand and Vietnam. Therefore it becomes imperative for Japan to increase its market share in China.
Japan exported just 375 tonnes of rice, valued at 160 million yen ($1.45 million), to China last year. This owes not only to the prohibitively high prices at stores but also the strict safety requirements imposed on Japanese rice by China. According to a survey by the Japan External Trade Organization, locally produced rice went for 7 yuan to 33.78 yuan ($1.01 to $4.89 at current rates) per kilogram in Shanghai stores early last year, as against the cost of 99 yuan of Japanese rice. By setting up its own rice store, Zen-Noh aims to establish a new distribution model that keeps local intermediaries like wholesalers and retailers out of the process from imports to the sale. The group hopes to lower prices and get Japanese rice on the dinner tables of China’s growing middle class.