TOKYO -- The government said Wednesday it will raise the prices of five major brands of imported wheat it sells to domestic flour milling companies by an average of 2 percent to 57,720 yen per ton from October, the farm ministry said Wednesday.
The planned hike stems from rises in imported wheat prices in the March-August period over the September 2010-February 2011 period due to tighter Russian export controls through June and a flood that pounded Australian farms, the Ministry of Agriculture, Forestry and Fisheries said.
An official at Nisshin Seifun Group Inc. said, "We intend to make arrangements so that the price revision will be reflected in our product prices."
Nisshin and other milling firms may raise retail prices of bread, pasta and other wheat products due to the price revision.
The envisioned hike under the government's biannual wheat price adjustment system will mark the third consecutive hike following a raise of an average of 18 percent in April.
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Although the recent sharp rise in the yen against other major currencies is putting downward pressure on import costs, "wheat price rises on the international market have outweighed the effects of the stronger yen," a ministry official said.
Under Japan's wheat price subsidization system, the government buys all imports and resells them to flour millers at higher prices. Revenues stemming from differences between the government's purchase and resale prices are used to subsidize domestic farmers.
