The 2025 crop year is expected to finish with total production of 511,000 paddy tonnes. Photo: Rice Breeding Australia

ASX-LISTED SunRice Group has reported a four percent dip in revenue to $1.85 billion, while earnings rose 3pc to $147.7 million for the financial year ending April 30.

SunRice’s results have come out just ahead of July 1, when New South Wales legislation removing rice vesting arrangements comes into effect, ending nearly a century of single-desk rice marketing in Australia.

The company’s Rice Pool segment saw a drop in revenue of 4pc to $370M, with strong Riverina supply and positive sales supporting the result.

However, poor mill-out rates for the Crop Year 2024 production and weaker global tender prices pressured paddy prices to growers and overall revenue.

Revenue also fell for the International Foods segment, down 4pc to $860.4M, and for the Cop Rice business, which dropped 1pc to $250.6M.

Rice Foods reported a 10pc increase in revenue to $132.5M, while Riviana Foods saw a 4pc rise to $230.8M.

SunRice Group chief executive officer Paul Serra said the company maintained positive earnings and profitability despite a challenging operating environment.

“While the Group was not immune to broader market pressures – including inflation, foreign exchange volatility, heightened competition particularly in the Pacific and US markets, and the lower mill-out rates of the CY24 Australian crop – we responded with agility and discipline,” Mr Serra said.

He said the branded segment was “a key contributor to performance” and accounted for approximately 70pc of sales for FY25.

“We built on our momentum in the Middle East, saw continued growth of our Toscano range in the Australian bakery segment, and expanded our pet-food presence through the successful acquisition of SavourLife.

“These outcomes reflect the strength of our brands, and the trust consumers place in them.”

Mr Serra also updated shareholders on the $15M project to upgrade the Leeton manufacturing operations which commenced during FY25.

Expected to be fully operational in FY26, the project will involve replacing and modernising around 75pc of the packing and production equipment.

These enhancements are expected to help boost productivity, improve operational efficiency, and significantly increase volume capacity.

Paddy price concerns

The CY24 paddy price was finalised at $406 per tonne for medium grain rice, a drop from the $430/t received for CY23 and a significant reduction on the CY22 result of $461/t.

SunRice chair Laurie Arthur will be stepping down from the role in September.

In a statement featured in the Annual Report published on Thursday, outgoing SunRice chairman Laurie Arthur said he was aware that the CY24 return was “a disappointing result for our Riverina growers”.

“While USD-AUD exchange rates have remained low and hence favourable for exports this year, the poor mill-out rates for the CY24 crop, which were the lowest experienced in more than five years, was the material driver of the lower paddy return, with the rebound of the Californian rice crop from severe drought also impacting international tender markets and pricing,” Mr Arthur said.

“The excellent on-farm yields that most growers achieved, and the relatively lower temporary water pricing during the year, have hopefully enabled our growers to generate positive cash flows.

“We are acutely aware of the impact of inflation on inputs like fertiliser, chemicals and machinery, particularly when combined with high interest rates, on our growers.”

World record yields

The CY25 paddy price range currently sits at $380-$450/t with strong yields expected to result in a 511,000 paddy-tonne harvest.

Mr Arthur said marketing for CY25 will be ongoing for the next 12 months.

He said yields were a standout this season, with “exceptional” results “achieved across all valleys and varieties”.

“I believe a 32-hectare crop from one of our growers of Matilda that averaged 17.3t/ha is a world record for medium grain.

“Over 400,000 tonnes of Matilda was produced at an average of 12.5t/ha.

“I don’t believe any other rice producing country can replicate yields like this.”

Transition to deregulated marketplace

In preparation for the end of the rice vesting arrangement in the coming days, SunRice has announced a new strategy to promote engagement with growers, which it calls transitioning from being the ‘Buyer of Last Resort’ to becoming the ‘Buyer of Choice’ from CY26.

The result comes amid growing potential for new or existing Australian rice buyers to access export markets, creating the prospect of more competitive returns for growers who have traditionally supplied SunRice.

The strategy includes rolling out new grower communication channels under the Grower Central brand, alongside potential incentives to reward consistent supply and quality, and introducing new pricing mechanisms linked to grain quality and trash levels.

Mr Laurie said this was “just the start” with the company “looking at new ways to reward SunRice growers who consistently deliver volumes of high-quality paddy to us”.

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