Business Environment Profiles - Australia
Published: 12 July 2024
Rice production
550 Kilotonne
61.4 %
This report analyses the volume of rice produced in Australia. Rice is harvested and milled for immediate use in human food or animal feed, or stored for future use. Rice production is measured in kilotonnes and represents the amount of rice harvested during the financial year. The data for this report is sourced from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
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IBISWorld forecasts that rice production will sink by 10.0% in 2024-25 to a total of 549.6 kilotonnes. Rice production is highly reliant on water, with allocations from water authorities largely dictating the amount of rice that farmers can grow. The severe droughts affecting the East Coast over the three years through 2019-20 dramatically hindered yields as farmers struggled with water scarcity. However, the situation improved slightly between 2020 and 2022 resulting from better rainfall and rising dam storage levels, which collectively enhanced production. Nonetheless, this year's production has been dampened by a drop in demand from cereal grain wholesalers and reduced rainfall compared to previous years, illustrating the sector's vulnerability to both climatic and market dynamics.
Rice production is highly volatile since rice is a heavily water-reliant crop. Water authorities, like the Murray-Darling Basin Authority, allocate water permits to farmers to restrict their use of water from river systems in agriculture. This system is intended to preserve Australia's water systems and ensure the amount of water used each year is sustainable. The amount of water allocated to farmers each year varies in accordance with how much rainfall has already occurred and is expected to occur over the next twelve months.
Rice production in Australia is projected to expand at an annualised rate of 61.4% over the five years leading up to 2024-25. This sharp climb follows a period of depressed production spanning three years through 2019-20, primarily resulting from lower annual rainfall and reduced water allocations for farmers. The Basin Plan, part of the Water Act 2007, played a significant role in this reduction by mandating lower extraction levels in the Murray-Darling Basin from 2012 to 2019. As almost all of Australia's rice crop is cultivated in New South Wales with irrigation water from this basin, these measures heavily impacted production. However, a La Niña event leading to above-average rainfall from late 2020 to mid-2022 and expected to recur in the latter half of 2024 is set to partly offset these declines. Despite this heightening the availability of water, the industry faces challenges from reduced demand from cereal grain wholesalers and a strengthening Australian dollar, which will make exports more expensive and therefore less competitive in 2024-25.
IBISWorld forecasts that rice production will climb by 6.2% in 2025-26, to total 583.9 kilotonnes...
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