SunRice announced its second paddy price increase for local rice growers late yesterday afternoon.February 6, 2013 4:15am
SunRice announced its second paddy price increase for local rice growers late yesterday afternoon.
The increase means an extra $33.7 million in growers’ pockets from the 2011/12 harvest, which yielded 963,000 tonne of rice.
A $20 increase in October last year saw the price increase to $280 per tonne of rice.
Yesterday’s second increase of an extra $15 per tonne takes it to $295 per tonne.
SunRice had initially predicted a maximum of $260 per tonne.
Company chairman Gerry Lawson said it was a fantastic result.
‘‘We are delighted to revise our indicative full year medium grain price from $280 per tonne to $295 per tonne for the 2012 crop,’’ Mr Lawson said.
‘‘This increase contributes to an overall $35 per tonne increase on our initial estimate of $260 per tonne for medium grain announced at our annual general meeting.
‘‘That’s an additional $33.7 million that will be injected into regional communities over the course of the 2012 crop year via our rice growers.
‘‘This is a wonderful result and one that demonstrates SunRice’s ability to generate the best possible returns for Australian growers under vesting and the importance of the sole and exclusive export arrangements recently renewed by the NSW Government.’’
Deniliquin farmer John Bradford said the price increase was ‘‘fantastic news’’ for growers.
He expects it will also have flow-on benefits for surrounding communities.
‘‘It has been a very tough season and with the increase in water prices as well, this is just terrific.
‘‘It’s great to see the product is going so well.’’
Mr Bradford said yesterday’s increase further demonstrated that rice growers had made the right decision by not selling to Spanish food company Ebro Foods in 2010.
If the sale had gone through, Mr Bradford, who opposed the sale, believes farmers would not be seeing such great returns.
‘‘We knew there was going to be a turnaround (when SunRice wanted to sell to Ebro Foods).
‘‘All this extra money would have been absorbed by Ebro if we had gone ahead with the sale.
‘‘A paddy charter, which was developed as part of the Ebro deal and is now being pushed in relation to listing on the Australian Stock Exchange, is practically a contract which locks in a price.
‘‘It was questioned, because at the end of the day we need to know we will get as much (money) as we can. This is clearly more vindication for not selling.’’
Mr Lawson said a continuation of good trading conditions and the strong first half performance of the Australian Rice Milling and Marketing business underpinned the increase.
‘‘SunRice, and in particular Australian rice, continues to perform well in both branded consumer and tender markets,’’ he said.
‘‘In addition, at the half year SunRice’s global rice businesses achieved a group profit after tax of $15 million, a 24 per cent increase on the previous year.
‘‘This year continues to be one of recovery and growth for SunRice.’’
The overall 2012 crop increase will see the medium grain (Reiziq) third payment scheduled for February 2013 increase from the forecast $20 per tonne to $30 per tonne.
‘‘As a result of ongoing improvements to our cash flow, we are delighted to be in a position to support our growers in this way, particularly as they prepare for the 2013 harvest,’’ said Mr Lawson.
The revised paddy return relates to the 963,000 tonne crop harvested in April 2012.
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