Now that the drought has ceased, the industry's production levels are expected to get back on track
Melbourne, Australia (PRWEB) July 08, 2012
The Rice Growing industry in Australia is largely confined to the Riverina region (located in southern New South Wales) and northern Victoria. Since the industry is dominated by one company in Australia, Ricegrowers Limited, market share concentration is extremely high. As a water-intensive crop, rice production tends to fluctuate in response to seasonal conditions. In 2006-07, the industry was ravaged by drought, evidenced by the plunge in revenue over 2007-08. Moreover, production levels decreased dramatically and are yet to return to levels experienced prior to the beginning of the millennium. However, as seasonal conditions improved and rice growers returned to their paddocks, industry revenue rebounded significantly. According to IBISWorld industry analyst Craig Shulman, “Rice Growing industry revenue rose at an annualised 30.3% over the past five years to reach $248.3 million in 2011-12”.
Now that the drought has ceased, the Rice Growing industry's production levels are expected to get back on track and raise industry revenue. Revenue increased 37.3% in 2011-12 alone. With the end of the drought, production levels for the industry are expected to continue to rise and consequently raise revenue levels. Shulman adds, “profit levels are expected to follow, due to the industry's continued emphasis on growth productivity”.
However, the volatile nature of the Rice Growing industry is expected to hover over the forecast recovery. Since rainfall is expected to drop in line with the re-emergence of El Nino weather patterns, access to water is thus expected to drop. Furthermore, the Murray-Darling Basin conservation plan intends to restrict access to irrigated water significantly. Since the industry is nearly solely based around this region, any type of restriction will force the industry back towards a continued struggle, similar to what it experienced over the past five years. Consequently, IBISWorld expects that industry revenue will decrease over the next five years. The most likely beacon for hope for the industry in Australia is the possible emergence of a pest-resistant rice seed. This would allow rice growing to expand its area of production to Queensland.
For more information, visit IBISWorld’s Rice Growing report in Australia industry page.
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IBISWorld industry Report Key Topics
Operators in this industry grow rice.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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