Japan is the birthplace of the candlestick chart analysis that the market technicians worldwide use. The candlestick patterns were first devised in Japan and used for rice futures trading in Osaka in the 18th century Japan, or so the legends say.
The rice futures trading was stopped during the World War II as the government rationed the rice supply, and the government control of distribution of rice continued after the war until 2004.
Now that the rice market is more or less "free" (the government is still heavily involved in growing the rice), Japan decided to re-open the rice futures market for the first time in 72 years, and Monday August 8 was the first day of trading. The rice futures started trading on the Tokyo Grain Exchange and the Kansai Commodities Exchange, but trading was almost immediately halted at the Tokyo Grains Exchange as traders bid too high, and the limit up circuit breaker was triggered.
Japan's rice futures market is the one and only market in the world that deals exclusively with short-grain rice.
From the photo (from Yomiuri; Kansai Commodity Exchange), it looks like the pit trading, not the electronic one. Like good old days 300 years ago. Or it could be just an enactment of good old days.
From Yomiuri Shinbun (1:27PM JST 8/8/2011):
The rice futures started trading on August 8 for the first time in 72 years at the Tokyo Grain Exchange and the Kansai Commodity Exchange.
At the Tokyo Grain Exchange, buyers bid up the price of rice futures with the expectation that the price of rice will rise due to the Fukushima I Nuclear Power Plant accident. As of 1PM, no transaction has been settled. The officials at the Exchange say, "The supply concern due to radiation contamination is more wide-spread among traders than we thought."
The Tokyo Grain Exchange started the trade of 4 to 6-month futures on "Koshihikari" rice grown in the Kanto region, but the buy orders vastly in excess of the equilibrium contract price of 13,500 yen per 60 kilograms flooded the market. The Exchange has set the limit on price movement at 600 yen, but the trading has been temporarily suspended as it triggered a circuit breaker . No transaction has yet to be settled.
According to Nikkei Shinbun, traders on the Tokyo Grain Exchange thought the equilibrium contract price indicated by the Exchange was too low, and they bid as high as 18,500 yen/60 kilograms, 5,000 yen above the contract price.
On the Kansai Commodities Exchange, the futures contract on "Koshihikari" grown in the Hokuriku region (considered better quality than Kanto's) settled at 19,210 yen for 2011 January delivery, according to Nikkei.
In the physical rice market, the old rice from last year is fetching a huge premium for the same reason - radiation contamination scare. People are afraid that this year's crop may be contaminated with radioactive cesium and a host of other nuclides that the government hasn't tested. I had told my friends and family members to buy old rice before it was news, and this time they listened.