The latest release of the USDA Rice Crop Outlook Report (April 13) provides useful data on the global and US rice markets, which has implications for the rice-related businesses within Ricegrowers Limited, trading as SunRice (ASX:SGLLV). The global rice market is forecast to see the second consecutive year of demand exceeding supply (due mainly to supply issues), with global-ending rice stocks expected to be the lowest since 2017/2018 and equal to just four months’ demand. Prices for most grades, as a result, remain at record highs (US-medium-grain, which is a proxy for Australian grades) or trending higher in recent months (including Thailand +4%-5% and Vietnam +7%). Higher prices and supply shortages (ex-Australia) is generally positive for SunRice, providing opportunities for the International trading division, while encouraging domestic plantings which helps generate processing and licence fees. High prices are encouraging plantings in the US, with US planting intentions for the 2023/2024 harvest up 16% on the pcp, also aided by abundant rainfall and snow this winter. Australia (SunRice) has supplied most of the Californian crop shortfall over the past year and is likely to continue to do so until harvest levels/stocks are restored.
