Posted on October, 16, 2024 at 09:21 am
AUSTRALIA’S single-desk rice marketer, SunRice, has announced it will revert to a single-pool system for crop-year 2025 after receiving lower seed orders than expected.
This is a backflip on a decision revealed in August to create a two-pool system in order to limit the upcoming rice production to 500,000 paddy tonnes.
The announcement comes as growers commence planting across the New South Wales’ Riverina region.
In a release to the ASX last week, SunRice chairman Laurie Arthur said the drier growing conditions over the past three months have reduced seed orders.
“The Bureau of Meteorology has reported that the River Murray System inflows for September were 267 gigalitres, well below the long-term average for September of 1536 GL,” Mr Arthur said.
“In comparison with the historical record since 1896, 95 percent of previous monthly September totals have been higher than the inflows observed in September 2024.
“As a result, static water allocations and the need for additional cereal-crop waterings have contributed to seed orders for the CY25 crop year being currently lower than originally expected in May-June.
“In addition, poorer than expected CY24 milling yields has reduced expected carryover volume.
“Due to the combination of these factors, SunRice has formed the view that the anticipated CY25 crop size is unlikely to exceed our network and milling infrastructure capacity and our premium market demand, reducing the need for the use of a second pool.”
The two-pool system was to target a total of 500,000 paddy tonnes, comprising 450,000 paddy tonnes of medium grain and 50,000t of specialty varieties.
Under the framework, Pool 1 returns would be set at the regular rice pool range, while Pool 2 returns were to be significantly lower than $200/t.
Under the system, a growers’ Pool 1 allocation was to be 75pc of a farm’s average three-year final delivered tonnage.
If a grower wished to produce more than this allocation, excess tonnages would attract the Pool 2 returns, which currently sit well below the CY24 rice pool range of $370-$430/t.
Mr Arthur said SunRice would continue to accept seed orders for all varieties “throughout October and beyond”.
“All allocations to Pool 1 for medium grain varieties will no longer apply and growers can choose to increase or change their seed orders, including for specialty varieties.”
Mr Arthur said SunRice thanked the growers for their patience.
“We understand that the CY25 seed ordering process has been more complex than in recent years.
“SunRice continues to focus on maximising your returns from growing rice and we appreciate your continuing support.”
ABARES September Crop Report predicted rice production to fall by 17pc to 515,000t in 2024-25, driven by lower area planted.
Lower global prices were also expected to contribute to reduced rice area.
High water availability across the Murray-Darling basin and a favourable rainfall outlook for spring was expected to support average yields.
Source: Grain Central