After a difficult start, this year’s sugar beet crop is making better progress with sugar production expected to exceed quota next year, says British Sugar parent company ABF.
“Planting for the new year was later than usual and early growth was held back by unseasonably cold weather,” said ABF in an interim management statement on Thursday (11 July).
“The crop is now making better progress and we expect sugar production next year to exceed both quota and the requirements for bioethanol production.”
The UK campaign in 2012-13 produced 1.15m tonnes of sugar, which compared with 1.32m tonnes in the previous year, said ABF.
Talks are continuing with NFU Sugar in an effort to resolve the dispute over British Sugar’s proposed £30.67/t to growers for the 2014 crop.
“The beet price for the 2014 crop, which will be processed in our 2014-15 financial year, will be based on the already agreed price mechanism,” said ABF.
“But British Sugar’s £3/t supplement to the price determined by this mechanism has been rejected by the NFU, although discussions are continuing.”
World sugar prices have fallen steadily over the last two years and ABF said it was now seeing some softening of European prices for the forthcoming year.
But the company said it was “well placed to succeed” when sugar quotas for EU domestic production are abolished on 30 September 2017.
“Beyond 2017 we expect some pressure on European prices but, as a well invested business and one of the world’s lowest cost producers, we also expect to be well placed to succeed in this market.”
The tariffs for sugar imports into the EU are not affected.
ABF sugar revenues in the last 16 weeks were 15% lower than last year – mainly reflecting a different phasing of UK volumes and the timing of shipments of Zambian exports to the EU.
But year-to-date sugar revenues were 1% ahead and are expected to be in line with original projections for the full year, said the company.
Poor weather delayed sugar beet planting in Spain and the area drilled is smaller than last year, with next year’s sugar production expected to fall marginally below quota.
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