SunRice had forecast the challenges it would face this year to its annual general meeting last year, but the latest outlook does appear more bleak than first thought. 

The trading challenges across several of the companies key markets have been in decline, with medium grain prices reaching the lowest levels seen in a decade.

This has impacted on pricing and volumes, as well as profitability. However, there was some good news.

The 2016-17 global paddy production forecast to be a record high of ~480 million tonnes and global stockpiles remain at the highest levels since 2001/02.

SunRice chief executive officer Rob Gordon said as a result of the recent conditions, the company had downgraded its net profit after tax for the current financial year to be in the range of $0 to $35 million. That number is down from the predicted $40 million. 

“Our strategy over the past five years, which has included enhanced value-adding activities and the intensification of our entry into branded markets, has improved SunRice’s commercial resilience,” Mr Gordon said. 

“However, the global rice market is presently experiencing a ‘once in a decade’ commodity cycle trough.

“It should be highlighted that, despite global rice prices continuing to decline, Australian growers will receive a strong paddy price for C16 and the dividend for the current financial year is anticipated to be maintained at a similar level, subject to the year-end audit and formal declaration by the board.”