According to the local sources indicated in adf.farmonline.com.au, that the Australian food processing and exporting company SunRice has fixed 2017 rice forward price at $400 per ton for medium grain Reiziq rice crop, and this Reiziq is a semi-dwarf medium grain variety. It has also fixed the next year’s forward price for Sherpa rice variety at the price of $380 per ton. Sherpa is a cold-tolerant and less water-requiring and high-yielding rice variety. This variety was introduced in 2011. In addition; the local sources also informed that the company locked in next year’s prices much earlier while the harvest in the New South Wales (NSW) region for the 2016 rice crop is still underway.
Further, it has been highlighted that rice continues to maintain strong returns while other crops have experienced significant volatility in recent times. It was informed that there is a significant demand for Australian rice and this contract is designed to ensure that the growers are able to make commercial decisions now to grow rice for harvest in 2017 and to participate in premium markets, as it was revealed by the company’s Chairman. The contracts will open on May 2 on a first come first serve basis and will close when an undisclosed tonnage is reached. It has been stated that such development is likely to have an impact on medium grain prices globally. It was also narrated that the California is another major medium grain rice growing region.
According to the February 2016 crop report, it has been indicated that the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasts Australia’s MY 2015-16 (April 2015 – March 2016) paddy rice production to decline to around 305,000 tons (around 240,950 tons, basis milled), which down about 58% from an estimated 724,000 tons (around 570,380 tons, basis milled) in MY 2014-15. Furthermore, it has been indicated that the ABARES attributes the decline in paddy rice production to a 56% y/y decline in planting area to around 31,000 hectares from an estimated 71,000 hectares in MY 2014-15, reflecting a significant reduction in supply of irrigation water available to rice growers in the main rice growing region New South Wales.