Deal reached with British Sugar over beet contracts
- Credit: Su Anderson
Sugar beet growers are set to receive a greater benefit from any uplift in sugar prices as part of a new deal with British Sugar.
National Farmers' Union (NFU) Sugar and British Sugar have announced one-year and three-year sugar beet contract terms for the 2020/21 crop and beyond.
The one-year contract for 2020 will be at a contract price of £19.60/t, with no crown tare reduction and based on the current sugar content payment scale. This is equivalent to £20.99/t with the crown tare element.
The three-year contract for 2020-22 is £20.45/t, with no crown tare reduction, equivalent to £21.90/t in year one and £21.18/t in years two and three with the crown tare reduction.
Both contracts will also offer a bonus price for growers, which triggers if the European Union reference price for white sugar reaches a certain value.
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Under the one-year contract, it would trigger at 375 euros a tonne, giving growers a 15% share of the price above that point. Under the three-year contract, growers get a 25% share of the price above 400 euros a tonne.
A maximum of 65% of the total, national contracted volume will be available on three-year deals in any combination, on a first-come-first-served basis.
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NFU Sugar board chairman Michael Sly said growers would receive a greater benefit from any uplight in prices, and bonuses will not be compromised by Brexit.
"Considering the difficulties and uncertainty facing growers now and into the future, it is important that a price has been agreed that recognises the risks and costs now associated with growing sugar beet," he said.
"We are committed to improving transparency in the supply chain and ensuring growers are paid fairly for their produce and the removal of the 0.02% price reductions in measured sugar content on beet tested demonstrates that.
"We are disappointed that there is a reduction in the mileage cap in the Newark factory area but this is unfortunately a reality of the new market. We hope the gradual cap reduction will give affected growers the extra time necessary to realign their businesses."
British Sugar Agriculture Director Colm McKay said: "We're pleased to have reached this agreement with NFU Sugar and believe it offers growers both certainty and choice.
Many growers were asking us for a new three-year contract, and together with NFU Sugar, we have delivered that. Both the one-year and the three-year contracts benefit from market bonus triggers, allowing growers to share the benefits when the sugar market performs well."