Tokyo, Aug 22 - Japan's Ministry of Agriculture is set to raise its sales prices for imported wheat to local flour millers by around 20 percent for the six months from October, trade and flour industry sources said on Friday.
A ministry official said an announcement is set for next week, but declined to comment further.
Japan's government buys five types of milling wheat from the United States, Canada and Australia via tenders and sells to millers at prices fixed twice a year under a scheme introduced in April last year.
Japan, the world's fourth-biggest wheat importer, keeps a tight grip on wheat imports by imposing high tariffs on other import routes, as it relies on wheat imports for almost 90 percent of domestic food-use demand.
The October-March price of each wheat type will be based on a weighted average of the ministry's purchase prices in the eight months to July, 2008.
During this period, Minneapolis Grain Exchange wheat futures hit $25 per bushel in February, a record high for any U.S. wheat futures contract.
"Another price hike is widely expected as the new prices will have to factor in the record market prices in February," said a manager at a Japanese trading company.
U.S. wheat prices have since retreated on easing supply concerns. On Thursday, MGE spring wheat a benchmark for hard wheat types, settled at $9.68 per bushel and Chicago soft red winter wheat was at $8.97-¼ per bushel.
The expected rise in the ministry's October-March sales prices would follow a 30 percent rise for each type in April, the largest one-time hike since a record 35 percent increase in 1973 after an oil shock.
This time, price hikes could vary according to the different types of wheat the ministry imports, the sources said.