Rice futures in Tokyo rose sharply on Monday, on their first trading on the bourse in 72 years, triggering the suspension of trade.
Rice price hit ¥18,500 per 60 kg, almost 40 percent higher than the pre-trade reference price of ¥13,500, on worries about Fukushima radiation and late-July heavy rains that may affect the crops.
People are concerned that the rice supply may be smaller and this was reflected in the price, said Nobuyuki Chino, the chairman of Tokyo Grain Exchange’s rice futures trading committee.
The other bourse that started trading rice futures on Monday, the smaller Kansai Commodities Exchange, started with a reference price of ¥13,700 and did not set a limit for new contracts. Its first trade for the most-active January contract was at ¥19,210.
Behind the rapid price surge may be the speculative players who sensed the possible impact on consumers of the planned rice tests, amid radioactive contamination fears, said Yoshiro Takahashi, the president of Rice Databank research firm based in Tokyo.
The exchanges have relaunched rice futures for the first time since the early postwar era to help farmers, distributors and others involved in the industry protect themselves from price swings. The trading is on a two-year trial period and the exchanges will decide after if they make the rice futures trading permanent.
Photo by HerryLawford