Ricegrowers Ltd. Class B · ASX:SGLLV
Ricegrowers Ltd. Class B — Rice Field Day 2016
22 slides from Ricegrowers Ltd. Class B's conference presentation, Mar 9, 2016
Slide 1: Rice Field Day Global Market Update
Rice Field Day Global Market Update Rob Gordon - Chief Executive Officer Thursday 9 March 2016
Slide 2: Agenda
GLOBAL MARKET UPDATE Agenda • Global Market Conditions • California Rebounds • Australian Factors • C17 Price Outlook 2
Slide 3: Pricing Indicators
Pricing Indicators World Rice Prices Foreign Exchange Milling Yields Crop Size Branded Markets Smooth Pricing 3
Slide 4: Global Oversupply Undermining Prices
Global Oversupply Undermining Prices 2016/17 global paddy production is forecast to be a record high of ~480 million tonnes. ‒ Resurgence of California medium grain rice production Global stockpiles are at the highest levels since 2001/02, with US stockpiles at highest levels since 1986/87. In
Slide 5: Asia to Offload Stockpiles
Asia to Offload Stockpiles The Thai Government plans to clear 8 million tonnes of stockpiled rice during 2017 ‒ All remaining stocks of food- and non-food-grade rice China’s endings stocks in 2016/17 are forecast to increase to around 69.3 million tonnes, an increase of about 9% on previous year
Slide 6: MG, LG, Fragrant and Basmati Prices
MG, LG, Fragrant and Basmati Prices US$/tonne Comparative Rice Prices (since June 2011) 1,600 Californian Medium Grain Rice Pakistani Basmati 1,400 Thailand Long Grain White Thailand Fragrant 1,200 1,000 800 600 400 200 6 Source: Live Rice Index
Slide 7: Global pricing: Stocks-to-use Ratio
Global pricing: Stocks-to-use Ratio Indicators point to the continuing softness in global prices as record stockpiles levels are unwound A year ago, some indicators pointed to a medium term tightening of the market - these did not eventuate We anticipate no meaningful rebound in prices in the
Slide 8: California Rebounds
California Rebounds • Plentiful water • Drought has ended • Average size crop returns, despite ongoing price weakness 8
Slide 9: California Rebounds from Drought
California Rebounds from Drought California is SunRice’s major competitor in medium grain segment of the global market Californian production has re-emerged strongly over past 12 months, from severe drought conditions to a water availability outlook that is extremely positive ‒ C17 planted area
Slide 10: Positive Rain and Snowfall Conditions
Positive Rain and Snowfall Conditions Northern California precipitation 220% of average Key reservoir storage at 130% of normal, with above average runoff/inflows anticipated for several months Northern Sierra snowpack running at 143% of average Trend currently tracking ahead of previously w
Slide 11: Rainfall at Record Levels
Rainfall at Record Levels 11 Source: http://cdec.water.ca.gov/cdecapp/precipapp/get8SIPrecipIndex.action
Slide 12: C17 Outlook: Average Size Crop Despite Low Prices
C17 Outlook: Average Size Crop Despite Low Prices C17 planted area estimated between 440,000-490,000 acres ‒ ~9% lower than C16 ‒ 10 year average is 541,000 acres C17 supply anticipated to be 2.3-2.5 million tonnes ‒ 10 year crop average is 2 million tonnes Despite currently low prices, key dr
Slide 13: Medium Grain Prices: California Paddy
Medium Grain Prices: California Paddy US$/tonne California Medium Grain Paddy Price (since Sept 2014) 650 $602 600 550 $518 500 450 $396 400 Period Since 2016 Rice Field Day 350 $287 300 250 $275 200 Prices have been adjusted for storage and drying costs 13 Source: SunRice
Slide 14: Medium Grain Prices: Tender Markets
Medium Grain Prices: Tender Markets US$/tonne (FOB California Port) Japan Minimum Access Pricing (Since Sept 2015) $835 $830 820 $820 $775 $775 770 $755 $745 $775 $735 $735 $710 $755$745 720 $745 $710 $710 $685 $710 670 $685 $685 620 Period Since 2016 Rice Field Day $580 $570 $565 570 $560 $535 $530
Slide 15: Australian Factors
Australian Factors • Mill yields stabilised • Positive C18 water outlook • C17 crop size returns to average levels 15
Slide 16: Australian Crop Size versus Pricing
Australian Crop Size versus Pricing '000 tonnes Crop Size and Paddy Price (since CY10) A$/tonne 1,200 450 $417 $400-410 $415 $395 400 1,000 350 $317 800 300 $294 250 $255 600 200 400 150 100 200 205 800 963 1,161 829 690 244 Forecast 50 +800 0 0 Crop Size ('000 tonnes) - LHS Paddy Price (AUD) - RHS
Slide 17: Foreign Exchange Movements – A$/US$
Foreign Exchange Movements – A$/US$ A$/US$ (since January 2015) 0.85 Period since 2016 Field Day 0.80 0.75 0.70 0.65 Stronger A$/US$ exchange rate is unfavourable for international rice sales: no indications ahead of a weakening below US$0.70 17 Source: Bloomberg
Slide 18: Mill Yields & Overhead Recoveries
Mill Yields & Overhead Recoveries Expecting continuation of average milling yields. However, monitoring elements that could cause variances, which include: ‒ Wide spread of planting dates this season, which ranged from early October to mid-December; ‒ Extreme heat in early February; ‒ Cooler finis
Slide 19: Water Outlook for C18
Water Outlook for C18 Outlook for water allocations for next season presently positive ‒ Total active water in MDBA storages now ~40% higher than last season ‒ Major Murray and Murrumbidgee valley dams holding ~70% capacity ‒ Expecting close to maximum allowable volumes to be carried over Howeve
Slide 20: C17 Price Outlook
C17 Price Outlook • Price indicators negative • SunRice resilience • Rice remains attractive prospect for C18 20
Slide 21: Pricing Indicators: On Balance Negative
Pricing Indicators: On Balance Negative World Rice Prices Foreign Exchange Milling Yields Crop Size Branded Markets Smooth Pricing 21
Slide 22: Rice Remains an Attractive Prospect for C18
Rice Remains an Attractive Prospect for C18 SunRice pricing has held relatively well despite downward global trends ‒ Demonstrates the insulating power of brands and international trading SunRice strategy has provided insulation from price cycles ‒ Continue growth across several diverse and vibr