The Ministry of Agriculture for Japan will introduce a new wheat pricing system in the country that links the cost of imports with market prices, the Nihon Keizai Shumbun evening edition reported Tuesday. The current practice is to fix the figure once a year, but the new plan changes import prices two or three times a year based on market trends.
The move officially makes wheat's status in Japan on par with rice as an "ordinary commodity." The move marks the first change in the pricing policy in 59 years.
The ministry will also introduce an auction system that will let flour milling firms bid for wheat imports. The current system has the government purchasing all incoming wheat through trading firms and reselling it to the flour milling firms at a marked up price.
A ministry official also said Tuesday that Japan is seeking 77,000 metric tons of wheat in tender to be concluded Thursday. About 90% of domestic wheat consumption in Japan - 5 million tons annually - is imported.
The new pricing system may result in higher wheat, bread and noodle prices with international wheat prices at a high point.