SunRice releases pool price range for the 2024 crop year

Speaking at the RiceX annual field day held at Coree on Thursday Mr Serra said the range for the CY24 was $370 per tonne to $430/t for medium grain Reiziq.

He said this was $20 lower than the opening range for CY23, however there were several global and domestic factors affecting prices.

Mr Serra also said the range for the CY23 rice pool had been revised with a new range of $415/t to $440/t for medium grain Reiziq, from the last updated range of $410/t to $450/t in November 2023.

He said shipping costs were a major factor affecting the current prices and why the range was being tightened.

"Shipping costs have been awful," he said.

"The last four months in particular there has been a huge impact from the conflict in Israel and Palestine and the effects to the Red Sea essentially being unusable so the ships now have to go all the way down around Africa to get to their destination market.

"It's more than doubled the shipping costs and that is essentially the sole factor of why you'll see we've pulled down the top end of the range for CY23.

"That cost impact is massive given that most of the export rice from Australia is being sold into the Middle East."

However Mr Serra said there were positives out of the year with great news on overhead and recovery.

"There was a great quality crop last year, really good efficiency through the plants and record high cost savings, so all that together has been a great thing and we've had lots of rice which is always better than not having enough," he said.

Mr Serra said California had not been in the rice market for the last two years, however they had now re-entered affecting the Japan MA market but the company had taken action early.

"We knew about the Japan MA tenders so we took preventative action early in the year to sell as much we can to the early tenders and so we didn't participate in the last couple of Japan MA tenders because that would've given you a paddy price well below the cost of production," he said.

"Those actions we took in the first half of the year gave us a really strong starting point and it's been the shipping costs that's led to the cool down of that top range."

Mr Serra said at the end of the day the final paddy price depends on the amount of rice they have to clear into bulk markets.

"Most of the rice, that's circa four to five hundred thousand tonnes, produced in Australia is sold into our brands around the world," he said.

"That give us a return that's a long way ahead of the global commodity price for medium grain rice."

Mr Serra said Japan was the biggest bulk market for medium grain rice and in CY23 it had dropped around 60 per cent with the volume from California.

"That bulk market is offering very poor return so that's why we're trying to open other trades into Turkey and other parts of the world which is slightly better," he said.

Heading into CY24 Mr Serra said shipping would continue to have an impact, with prices dependant on when the conflict in the Middle East is somewhat resolved.

He said they expected California to have another near record crop year due to the amount of water sitting in their dams.

"In-country inventory levels are sitting at almost all time high for medium grain rice because they have not been able to sell a much they would have liked to the Middle East," he said.

"We think next year the Californian industry will have to clear a significant amount of rice through that Japan MA complex."

Mr Serra said China was another key player.

"We believe China's crop is coming slightly behind previous years but still have a level where they will look to clear their normal amount of rice into the Japan MA market because it provides them with currency liquidity," he said.

Mr Serra said the range for CY24 was based on these factors.

"We're expecting to continue to grow our branded products, hoping to grow those by another 5 to ten per cent in the next 12 months but that's going to be offset by the rice from this year and next year into bulk markets," he said.

Mr Serra said SunRice was in a healthy position with the amount of crop being carried over from last year's harvest to be able to leverage the market.