A surge in the price of wheat, barley and sea freight has forced Japan to order an unprecedented 55 billion yen (£231 million) emergency budget increase to secure the nation’s food supply.

Analysts have given warning that Japan – along with the rest of the world — should expect the present extreme market conditions to become the norm.

With wheat prices surging by a record 80 per cent between May and September, Japan discovered yesterday that its Y203 billion wheat and barley budget had run out with two months remaining.

For the first time in the postwar era, the Government has been forced to tap emergency budget reserves to keep Japan’s noodle-makers, bakeries and breweries running.

Notices have begun to appear in shops apologising to customers for the unexpected price increases in everything from croissants to mayonnaise.

At an upmarket bakery located beneath the offices of Goldman Sachs and Lehman Brothers in central Tokyo, a new sign blames the 4 per cent increase in the price of a baguette on a “worldwide raw-material drain”.

A Ministry of Agriculture official said that the tapping of Y55 billion from the budget reserves would assure supplies for the rest of the year, but noted that the exercise would prompt a significant revision of what it costs to feed Japan.

The Government plans to earmark about Y300 billion next year to secure its supply of about 5 million tonnes of wheat and 270,000 tonnes of barley.

The sharp rise in wheat prices comes after a poor harvest in Aus-tralia – one of the three leading exporters of the grain to Japan – and after what one commodities analyst in Macquarie Securities said were structural changes to the price cycle of wheat.

Global stockpiles have dwindled to 32-year lows and continue to decline as the economies of India and China expand, millions of their people emerge from poverty and appetites become more diversified.

Wheat and barley prices have also been squeezed higher by the new global emphasis on bio-fuels as an alternative source of energy for cars. Because demand for ethanol has raised the price of maize, farmers have been growing more of that crop instead of wheat and barley.

Looming over all of this is the recent record cost of moving goods by sea, a critical concern for Japan, which has nervously watched the London-based Baltic Dry Index of bulk shipping rates climb in the past month.

Because the country relies on imports for 90 per cent of its wheat for human consumption and 70 per cent of its food-use barley, the Government traditionally has been a monopoly buyer.

Bulk consumers, such as food companies and breweries, then buy their supply from the state.

Kirin, the largest Japanese brewer, has said that it will raise beer prices for the first time in 17 years to accommodate the surging barley price and the cost of aluminium for its cans.

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