Price Determination in the Australian Food Industry A Report

Industry risk
• The overall returns to the national rice industry are influenced by the size of the rice crop.
Figure 113. Rice crop size, ’000 paddy tonnes
’000 paddy
tonnes
2000
1500
1000
500
0
1996 1997 1998 1999 2000 2001 2002 2003
Source: Sunrice annual report 2003
• The future uncertainty over access to sufficient water supplies is a significant challenge faced by
the domestic rice industry. Drought has severely restricted the size of the 2003 crop and will
limit 2004 output.
• Industry has attempted to manage this risk over previous years through a variety of strategies:
– improving the efficiency of milling operations;
– improving water-use efficiency in the industry;
– investing in value-added products for the domestic market;
– increasing the use of rice in co-products;
– increasing the diversity of markets into which the industry supplies rice; and
– building global supply alliances.
RICE – VALUE ADDING TO THE PRODUCT
Price Determination in the Australian Food Industry A Report
The scope for value-adding
Rice is a staple food. Traditional regular long grain and medium grain products have long been the
backbone of the retail product offering in the market but these lines have been steadily losing
market share over recent years to a range of specialty rices and other more convenient foods.
Efforts by the industry to add value to the returns from the rice crop are below.
Efforts to add value to rice
Diversifying end market mix
Expanding taste and food styles
Expanding the application of rice
Reducing preparation times
• increasing the penetration into destination export markets with a focus on
discerning markets;
• increasing the investment in brand presence in export market destinations to position
the product;
• protecting the overall business by sourcing high quality rice from other supply sources
to ensure the reliability of supply.
• packet specialty rices;
• flavoured rices.
• rice cake snacks;
• companion animal products.
• quick cooked products;
• convenience meal kits;
• convenience snack cups (just add water).
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