Feb. 24 (Bloomberg) -- Japan, Asia’s second-biggest wheat importer, will raise prices of the grain to local flour millers by an average of 2.3 percent in April, reflecting a sales-tax increase by the government.
The Ministry of Agriculture, Forestry and Fisheries said in a statement today it will raise prices of imported wheat to 58,590 yen ($573) a metric ton on average on April 1 from 57,260 yen, reflecting an increase in the sales tax to 8 percent in the same month from 5 percent.
Higher prices will boost costs for companies including Nisshin Seifun Group Inc. and Nippon Flour Mills Co., and add to inflation as the Bank of Japan’s record stimulus weakened the yen and boosted costs to import raw materials ranging from fuels to metals.
The agriculture ministry controls overseas purchases and domestic sales of wheat to stabilize supply, and reviews prices to local millers twice a year. Japan depends on imports for almost 90 percent of the grain.
Costs to import wheat eased in the six months through February, compared with the previous half-year, as a bumper harvest in Australia lowered prices of the grain from the country, said Sunao Orihara, a director at the ministry’s grain- trade division. Shipments from Canada were more expensive, partially offsetting lower costs for Australian grain, he said.
Australia was the third-biggest supplier to Japan in the year ended March 31 after the U.S. and Canada, representing 18 percent of shipments, according to the ministry. Japanese companies use Australian wheat to make noodles, while Canadian grain is used to make bread.
--Editors: Jarrett Banks, Sungwoo Park