UPDATE 2-Japan consumers to pay 30 pct more for foreign wheat

(Recasts lead, adds comments, details)

By Risa Maeda

TOKYO, Feb 15 (Reuters) - Japan will raise the average price of imported wheat by 30 percent to 69,120 yen ($641) per tonne from April, the farm ministry said on Friday, passing onto users part of soaring import costs due to record market prices.

Japan relies imports more than 80 percent of its wheat, its second most important grain after rice.

Japan buys five types of milling wheat from the United States, Canada and Australia -- the world's top three exporters. It buys centrally via tenders and sells to millers at prices fixed twice a year under a scheme introduced last April.

It would be the largest one-time hike since a record 35 percent increase in 1973 after an oil shock, the ministry said.

If the new scheme's original price calculation rules are applied, the ministry should raise these major wheat types by 38 percent on average given a sudden, sharp rise in market prices since it last changed sales prices in October.

But the ministry has decided to further absorb volatility in market prices and reduce the impact on margins at flour millers, such as Nisshin Seifun Group Inc (2002.T), and their customers.

"A 30-percent ceiling means that we're making extra efforts to cushion the shock on people's lives and industries concerned," Yasuo Sasaki, director at grain trade division of the Ministry of Agriculture, said at a news conference.

The 30-percent price rise on each wheat type from April would boost Japan's overall consumer price index (CPI) by 0.03 percentage point. It would require additional spending of 72 yen per household a month to 6,131 yen currently for flour and flour products, such as bread, Sasaki said.

"We feel that we're on the front line of national food security," Sasaki said, referring to the recent scramble for supplies by importers in the spot wheat market.

HIGH WHEAT PRICES

On Friday benchmark wheat prices WH8 on the Chicago futures market stood at around $10.40 per bushel, off a record high of $11.53 marked earlier this week.

U.S. wheat prices have risen some 50 percent in the past six months on rising demand as stockpiles in the top three exporting countries shrink following crop losses in the last two seasons.

The ministry has said the price of each wheat type for the six months from April is based on a weighted average of its purchase prices from June 2007 to January 2008.

The five wheat types the ministry buys via weekly tenders with licensed trading firms account for some 90 percent of its planned imports out of a total 4.86 million tonnes of milling wheat for the fiscal year ending on March 31.

The remainder is bought through more flexible tenders under a simultaneous buy and sell system, which better reflects market prices and local users' speciality needs.

The ministry began in April to revise sales prices more than once a year for the first time in more than 50 years so buyers of imported wheat would pay prices closer to market levels.

Sasaki said the ministry would wait before revising sales prices three times a year instead of twice.

Japanese millers last raised their product prices in November after the ministry, their main supplier, raised sales prices for all of the five wheat types by a then 10-percent ceiling in October from the April-September period.

Nisshin, Japan's biggest flour miller, said in late January that a 30 percent rise in the sales price from April would raise its annual costs by 30 billion yen ($278 million).