British Sugar is ‘open’ to longer contracts

©Tim Scrivener

British Sugar says it is open to the idea of offering growers longer multiyear contracts to help farmers cope with market volatility after EU production quotas end in 2017.

British Sugar managing director Richard Pike said the processing giant was exploring a number of options so growers could mitigate the impact of price fluctuations after restrictions on EU sugar production are lifted on 30 September 2017.

Any future pricing options, which are the subject of talks between British Sugar and the NFU, would be in addition to – rather than instead of – the existing agreement, whereby an annual fixed sugar beet price is set before the following year’s crop is drilled, he added.

See also: Post-quota pricing options revealed to sugar beet growers

“We could do longer-term contracts – we are open to that,” Mr Pike told a meeting of 380 sugar beet growers at the East of England Showground, Peterborough, on Friday (13 November). “If it actually provides greater stability – and allows growers to invest for the future – we can do that.”

Alternative

Other pricing options are also being explored. One could see beet prices linked to the sugar market or an alternative crop. This could enable growers to benefit from higher prices when the market was buoyant – but would also mean lower prices when the market was subdued.

A further option could see a price linked to a choice of dates when a crop is delivered to the factory. But any growers who wanted to benefit from market peaks would also have to accept market troughs, said Mr Pike.

Further grower meetings to discuss pricing options are due to take place over the coming weeks. They will be held at Newmarket (24 November); Easton College, Norwich (30 November); Marston, Grantham (4 December); and King’s Lynn (9 December).