"Disappearing" Rice Futures Trading-What's Behind? August 6th, 19:44
If you have investment experience, you may have heard the term "futures trading".
There are various futures transactions such as crude oil, gold and corn, but there are also rice futures transactions in Japan.
Historical rice futures born in the Edo period.
It disappeared in the era of Reiwa.
Exchanges, governments, agricultural organizations, and politics.
Behind the scenes, there was a conflict of ideas about the price of rice, which is the staple food.
We will dig deeper into the behind-the-scenes circumstances that affect our Gohan.
(Naoko Kawase, Reporter, Economic Department / Tomokazu Kogi, Reporter, Osaka Broadcasting Station)
The world's first futures trading from Osaka
There is a rice grain-shaped monument along the river near Nakanoshima in the center of Osaka city.
In 1730, the site of the "Dojima Rice Market" officially recognized by the Edo Shogunate, this market is known as the world's first organized futures exchange.
Yes, futures trading was not in Chicago or New York, but in Osaka, Japan.
"Osaka" at the time when annual tribute rice gathered from all over the country.
It is said that "70% of Japan's wealth is in Osaka", and it is said that futures trading was born to stabilize the price of rice.
The exchange was abolished in 1939 during the war, and the current "Osaka Dojima Commodity Exchange" has resumed trial trading of rice futures since 2011.
What is rice futures trading?
I wrote "experimental".
When it resumed in 2011, it was recognized as a test student by the Ministry of Agriculture, Forestry and Fisheries of the competent authority for a period of two years.
When I went to interview about how I do business every day, the person in charge showed me a dedicated system on my computer.
For rice to be delivered 2 months ahead, 4 months ahead, up to next year / June 2022, if the price and quantity desired by the person who wants to sell and the person who wants to buy match, the transaction will be completed. increase.
The price of actual rice is also determined by the balance between supply and demand, but there is no large market, and the price called the estimated amount paid to the producer when the JA Group and others purchase rice is a guide.
Farmers to use
We talked to producers who are using this futures contract.
Toshiyuki Tsuboya, the representative of a production corporation that makes 50 hectares of rice in Niigata City.
It is said that it is good that risk can be diversified by taking out a part of rice for futures trading.
Mr. Toshiyuki Tsuboya
"The price of rice was unstable until we harvested it, but with futures, we can make some predictions and it will be easier to manage. We still know this convenience. Many producers do not have it. "
A surprising phone call ...
The Osaka Dojima Commodity Exchange has been licensed for trial transactions every two years and has continued its business, but this is not a one-armed player, and I want to shift to a full-scale transaction with no deadline. I was submitting an application.
On the morning of July 27, the phone of an exchange official rang.
The content was "I would like to hear opinions on August 5" from the Ministry of Agriculture, Forestry and Fisheries.
This is a procedure that is carried out when approval is not possible, and the company suddenly became upset, and the people concerned sighed, "It's a blue sky."
Authentic rice futures, you can dream
On August 5, the Ministry of Agriculture, Forestry and Fisheries met the bureaucrat in charge and President Kazuhiro Nakatsuka of the Osaka Dojima Commodity Exchange.
The Ministry of Agriculture, Forestry and Fisheries pointed out that the number of producers and distributors participating in the transaction has not increased.
He said that he did not meet the condition of "necessary for rice production and distribution".
In response, the exchange responded, "The participation of producers is increasing, and some people are saying that they would like to participate when they move to full-scale transactions."
He also blamed the country's agricultural policy, saying, "The price of rice, the staple food, is confusing every time the idea that the country should stabilize and the idea that it should be decided by utilizing the market collides with each other."
As a result of the examination, the Ministry of Agriculture, Forestry and Fisheries decided not to approve the application for full-scale transactions, and notified the exchange on the following day.
It does not meet the approval criteria, again because the participation of producers and distributors is not increasing.
Various thoughts that intersect
In the agricultural industry, various "thoughts" and "thoughts" are mixed about rice futures.
The JA Group, which accounts for about 50% of the distribution of rice for main food, was originally opposed to rice futures trading.
The idea was that "rice futures are speculative money games" and would not lead to supply and demand and price stability.
These days, I haven't shown the opposite attitude, but I'm still cautious.
The lack of participation by the JA Group does not significantly increase the volume of transactions, and as a result, it seems that it has led to the problem of participants pointed out by the Ministry of Agriculture, Forestry and Fisheries.
Meanwhile, one JA official says the tone has changed over the last two years.
In the midst of serious rice surplus, there was an opinion that "it is not absolutely the opposite" because futures will be one indicator to read the future market and help farmers to voluntarily adjust production. That is.
However, these changes in tone did not surface and did not lead to major movements.
On the other hand, the Agriculture and Forestry Subcommittee of the Liberal Democratic Party has a strong influence on agricultural policy.
At the subcommittee held on August 4, most of the futures trading was biased toward Koshihikari produced in Niigata prefecture, it did not spread nationwide, and prices were easily distorted. He asked the Ministry of Agriculture, Forestry and Fisheries to make a careful judgment, "It must not be a thing."
After the meeting, an executive of the Liberal Democratic Party said, "Rice is different from other agricultural products. Let's work together to prevent the supply-demand balance from being greatly disrupted by all the farmers. That's what I told reporters.
What did the Ministry of Agriculture, Forestry and Fisheries think?
After the war, the country decided the price of rice for a long time, which led to the rigidity of agriculture. One executive said he was moving forward.
According to a person familiar with the matter, in June, although it started to allow the transition to full-scale trading of futures, it was not possible to coordinate and persuade the Liberal Democratic Party, and "the government office is proceeding without permission." It seems that it has caused a backlash such as.
Severe criticism from shareholders
Shareholders on the exchange have severely criticized this response.
Yoshitaka Kitao, president of SBI Holdings, which invests in the Osaka Dojima Commodity Exchange and holds more than one-third of the shares of the entire group, told reporters on the 3rd of this month, "Dojima is the birthplace of rice futures trading. So, Osaka must not lose this. Denying this is the people of "Muchimomai" who do not know the economy and do not deal with the world. " Strongly criticized.
He also expressed the idea that transparent procedures should be followed in making decisions.
This exchange loses its earnings pillar because rice futures trading exceeds 90% of the total trading volume.
In the future, we plan to increase the number of products we handle, such as gold futures trading, but we will be forced to review our management strategy.
How do experts see it?
Kazuhito Yamashita, an alumnus of the Ministry of Agriculture, Forestry and Fisheries and a research chief of the Canon Global Strategy Research Institute, who is familiar with agricultural policy, says that the essence of this issue is the disagreement about who will take the initiative in price formation.
Kazuhito Yamashita, Research Chief
"JA earns a commission for selling rice in kind, so we want to keep the price in kind as high as possible. JA will be priced with futures that we do not know. On the other hand, it is disadvantageous for consumers to set the price of rice at a distance from the market principle. "
"Price" is a message from consumers
Covering the movements surrounding the rice futures contract, I was made to think about how the prices of agricultural products, which are indispensable to our daily lives, should be determined.
“Food” is a core part of the country, and various policies are used by countries around the world to protect agriculture.
However, with large-scale trade agreements being signed one after another, lowering the hurdles for protection, and entering an era in which the competitiveness of agricultural products is being questioned, there is a limit to treating rice alone forever.
Producers make rice at their own discretion while reading the intentions of consumers.
At that time, price is an important message as a proxy for consumers' feelings.
Many stakeholders, from different positions, acknowledge that the power of a fair market is important.
How should the price of rice in Japan be decided?
I think there is an urgent need to create a price formation system that is easy for both consumers and producers to understand.
Naoko Kawase, a
reporter from the Ministry of Economic Affairs
, joined the Niigata Bureau and Sapporo Bureau in
2011,
and is currently
in charge of agriculture, forestry and fisheries administration.
Tomokazu Kogi, a
reporter for the Osaka Broadcasting Station,
joined the
station in
2007.
Covered the financial industry at the Ministry of Economic Affairs, and is currently in charge of economics at the Osaka Bureau.