Rice price to escalate

Posted by Isobel Drake on 28th July 2008

Ricegrowers, which trades as SunRice, has warned that prices of the food staple are set to rise in line with increases seen on the industry benchmark – Thai rice.

The price of Thai rice has trebled in recent times and the Chief Executive of SunRice, Gary Helou, has told The Age that this rise in price will begin to filter through to supermarkets via manufacturers. “We will try not to pass on too much (to consumers),” Mr Helou said. “We will always try to be an efficient operator. However, that rapid escalation in prices is hard to offset in purely cost reductions … Ultimately, you will have to pass on to the market the sharp increases.”

Mr Helou added that the price had stabilised of late, but was unlikely to return to the levels of last year. “For example, Thai prices went up from approximately $US300 a tonne to $US1000 a tonne. They have come off lately, to around $US800, but nevertheless it is a very, very sharp rise in rice prices – that’s an issue for manufacturers, traders and for consumers,” he told The Age.

The concern about the cost of rice comes at a time when leading agricultural scientists are set to debate the topic of rice growing in Australia and whether or not it is a waste of water. Agricultural scientists will discuss the issue this afternoon at The Australian National University.

The debate will bring together Dr John Angus of CSIRO Canberra’s Division of Plant Industry and Dr Eric Craswell and Dr Barney Foran of the Fenner School of Environment and Society at ANU.
The forum is the latest in the Resource Management in Asia-Pacific (RMAP) ‘Arguments’ series, that bring together leading academics to discuss issues of broad appeal aiming to generate public debate.

Dr Craswell believes that governments need to show leadership, realise that the industry in Australia is unsustainable and ensure there is adequate assistance for farmers who could no longer grow rice. “Rice requires more water than any other crop, and yields the lowest monetary return per unit of irrigation water used,” he advised. “The scarcity of water in Australia leads to the question: Should the production of rice be left to countries where the monsoon season is so wet that no other crop will grow? If governments showed leadership and provided assistance to the affected regional communities with restructuring and retraining, the bitter pill would not be so hard to swallow.”

Dr Angus disagreed, however, pointing to the fact that rice farmers are highly adaptable and are increasing the water efficiency of their crops. “Of all the annual crops that can be grown in the Riverina, rice gives the highest water efficiency,” he stated. “High profitability and the ability to expand or contract production in response to water supply are the strengths of rice in Australia.”

Dr Bourke said that it was important to have a discussion about the viability of the Australian rice industry: “This debate is important and timely. Underlying the context of this debate is the broader situation of rapid change to the planet’s climate, economic growth, the scarcity of basic foods and increases in price and the significant consequences for the poorest and least powerful people in the world,” he said.