SunRice predicts substantial profit increase next year
Local producers have anticipated a strong outlook for the upcoming summer cropping season with the announcement SunRice has a predicted net profit of $40 million for the 2018 financial year.
Addressing the SunRice annual general meeting in Jerilderie last Friday, CEO Rob Gordon said this year would see an increase in profit from last year’s $34.2 million.
However, Mr Gordon said ‘‘this will be dependent on market conditions and factors’’, including trends in global rice markets and exchange rate movements.
SunRice chairman Laurie Arthur said ‘‘overall’’ market conditions are improving and the business has seen strong performance since the start of the financial year.
‘‘This financial year, we’re marketing a large crop of 802,000 tonnes which is a massive upgrade from the previous financial year where we had a harvest of just 244,000 tonnes,’’ he said.
‘‘We’ve seen an improvement in the world market and we’re hoping for a good strong crop, with planting to take place in October.’’
However, Mr Arthur said low general water security allocation hangs an air of uncertainty over growers.
‘‘The New South Wales Murray allocation is at 13 per cent and farmers are anticipating how much water will be available come September and October,’’ he said last week.
Mr Gordon also announced SunRice is confident it will achieve the C17 paddy price range of $320-$360/tonne for medium grain.
Growers will also be encouraged to grow higher value varieties with the announcement SunRice will offer fixed price contracts for varieties such as Koshihikari ($520/tonne), Doongara ($450/tonne) and Reiziq ($360/tonne).
Although dependent on market conditions, Deniliquin grower Alan Walsh said these figures would allow for greater flexibility among farmers.
‘‘The new range of $320 to $360 for rice and with some contract prices out there, will give growers an opportunity to make planning decisions for their crop,’’ Mr Walsh said.
‘‘It will allow them to either fix tonnage in or budget for high paddy prices.
‘‘Things are looking positive and while water allocation is low, we’re hopeful something will happen soon.’’
Despite facing a ‘‘challenging trading environment’’ in FY17, Mr Gordon said the global rice market was moving beyond the bottom of the cycle, with improving medium grain rice prices due to a supply shortage in the California market.