Inflation moves on to pasta

Food prices are showing no signs of letting up as international prices for corn and wheat spread to other daily items, including vinegar and pasta.

Starting Sept. 1, Mizkan Group Corp. said it will raise the price of 37 consumer-use vinegar products by 8 percent to 10 percent and industrial-use vinegar products by 5 percent to 14 percent because of rising crop prices. It will be the company's first price hikes in 18 years.

Prices for pasta, including spaghetti and macaroni, have been rising since last fall, with industry leader Nissin Foods Inc. hiking prices in November and March, bringing the price of its MaMa Spaghetti to ¥225 from ¥174 for a 300-gram package.

Industry watchers say further pasta hikes are likely this summer because the price of Canadian durum wheat, the main ingredient, is skyrocketing amid growing demand from China and other emerging economies.

Supplies, by contrast, remain thin as many wheat farmers are shifting to different crops to cash in on demand for biofuel, they said.

Durum wheat is already three times higher than last year, industry observers say.

General wheat prices are controlled by the government, which purchases all of the imports, excluding durum wheat, and sets prices twice a year to sell to millers.

But prices for durum wheat are decided directly between the importers and the millers. The government has no role in the negotiations and there is no limit on price movements, so prices in Japan are often a direct reflection of prices in the market.

The nationwide consumer price index shows that the retail price of spaghetti began rising in December and climbed nearly 30 percent year on year in March.

"We have no choice but to raise prices (again) if market prices continue to rise," a Nissin Foods official said recently.

There is no sign that durum wheat will drop in the near future, observers say. But some players see the uptrend in prices as a business opportunity.