Teikoku Databank’s July 2026 survey projected that food price increases would continue through the remainder of the year.
Price hikes were observed for 5,780 processed foods – which include instant noodles, canned goods, and frozen foods – according to business intelligence firm Teikoku Databank.
The firm noted that this was due to the ‘worsening situation in the Middle East’, which caused price increases to crude oil and naphtha.
Naphtha, a petroleum-derived material used in food packaging and printing, is used to make products such as packaging films, can linings and inks.
Rising naphtha costs can indirectly raise food prices through higher packaging and distribution expenses.
Signs of strain already emerged earlier this year. Japanese snack giant Calbee switched some domestic packaging designs to monochrome versions in May, citing supply constraints and rising material costs.
Against this backdrop, Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) updated the Food System Act in April to help smaller food manufacturers and agricultural producers avoid below-cost transactions.
The aim is to create a legitimate pathway for producers and manufacturers to pass rising costs onto retailers and consumers without facing legal challenges or retail backlash.
The changes come as food price increases are expected to continue across multiple categories through the rest of the year.
The expected increases span multiple categories, though processed foods account for the largest share.
Food price hikes across categories
As of July, price increases had affected 2,566 food and beverage items. Teikoku Databank projects the cumulative number of affected products to reach 14,902 by November.
These items are primarily for household use – they include alcoholic beverages, seasonings, confectionery, and dairy products.
Table: Projected cumulative food and beverage price increases for 2026
Since Teikoku Databank launched the survey in 2022, the number of items with price hikes has exceeded 10,000 annually for five consecutive years.
Seasonings included dashi (broth), sauces, and soy sauce products, while alcoholic beverages and soft drinks included low-malt beer, imported wine, shochu, and sake.
The raw materials category saw price increases for items such as refined sugar in addition to wheat flour products.
According to the report, 92.5% of food price revisions cited rising raw material costs as a factor, while 69.8% were linked to higher packaging and materials costs.
2026 outlook
A wave of food price increases in Japan is expected to continue from summer onward, adding to broader food inflation pressures.
The report noted geopolitical tensions in the Middle East, including developments involving Iran and the Strait of Hormuz, could continue to put pressure on petroleum supplies and sustain cost pressures across the food industry.
Periods of yen weakness, including instances where the exchange rate exceeded 160 yen against the US dollar, are likely to further increase import costs.
The report also flagged risks from extreme weather, which could affect grain harvests such as wheat, alongside continued inflationary pressure on fresh food prices.
Insights from the report echo the sentiments of Ueda Kazuo, governor of the Bank of Japan.
“Since early spring this year, the environment surrounding economic activity and prices both in Japan and abroad has been significantly affected by increased tension over the situation in the Middle East,” Ueda said as he addressed the floor at the Kisaragi-kai Meeting in Tokyo on June 3.
“For a commodity-importing economy like Japan, higher crude oil prices cause a deterioration in the terms of trade – that is, an increase in the outflow of income to overseas economies – and exert downward pressure on the economy.”
He added that Japan relies on the region for more than 90% of its crude oil imports, meaning prolonged disruptions could affect both businesses and households.
Ueda outlined three possible scenarios tied to developments in the region.
If instability in the Middle East persists and crude oil prices remain elevated for an extended period, Japan’s economic growth could slow while inflation rises above expectations.
A more severe scenario would involve significant disruptions to global supply chains, which could affect the production activities of Japanese companies and lead to a sharper economic slowdown alongside stronger upward pressure on prices.
If tensions ease and ceasefire efforts progress, economic growth could outperform baseline projections while inflation, as measured by the consumer price index (CPI), could rise more slowly than expected.
