Japan to Increase Emergency Stockpiles of Grains, Yomiuri Says

By Jae Hur

Jan. 2 (Bloomberg) -- Japan, the world's biggest grain importer, plans to increase emergency stockpiles of corn, wheat and soybeans next year to ensure stable supplies at a time of soaring global prices, the Yomiuri newspaper reported.

The country plans to boost reserves, including privately held inventories, to three months of annual demand in 2009 from one to two months currently, Yomiuri said yesterday, without saying where it obtained the information. A team led by Prime Minister Yasuo Fukuda will draw up a report by March and submit it to the farm ministry, the newspaper said.

Japan's imports of corn, which come mostly from the U.S., are forecast at 16.3 million metric tons in the year ending September 2008, while wheat imports are projected at 5.5 million tons and soybean imports at 4.2 million tons, the U.S. Department of Agriculture said in a report on Dec. 11.

Wheat and soybeans have been among the best-performing commodities of the past year, with respective gains of 79 percent and 81 percent. Corn, which gained 18 percent in the past year, reached an 11-year high today of $4.62 a bushel.

Japan's emergency stockpiles of essential feed grains in 2006 included 536,000 tons of corn, 64,000 tons of sorghum and 350,000 tons of barley, according to a report by the U.S. Foreign Agricultural Service in March 2007.

Wheat inventories were set at 1.8 months' of demand, or about 900,000 tons, in 2006, the report said, adding that actual stock figures are not disclosed.

The target stockpile amount for soybeans was reduced to 39,000 tons in April 2006 from 43,000 tons in 2005, the FAS, a branch of the USDA, said in a separate report in May.

To contact the reporter for this story: Jae Hur in Singapore at jhur1@bloomberg.net

Last Updated: January 2, 2008 02:17 EST

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