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

Fri Feb 15, 2008 6:44am EST
 
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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: Quote, Profile, Research, Stock Buzz), 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.  Continued...

 

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