Quota brokers have seen a flurry of activity in the sugar market, with prices for contract tonnage entitlement (CTE) edging upwards and volumes rising sharply.
According to British Sugar, more than half the available tonnage released by the York and Allscott factory closures has now been transferred and trade remains brisk.
“We recommend that growers intending to purchase CTE take the earliest opportunity to avoid disappointment,” it said, reminding growers that the closing date for restructuring was 6 October.
The statement also emphasised: “BS will not be reallocating contract tonnage relinquished in the restructuring scheme. This will be used to mitigate the impact of any temporary quota cuts.”
Quota broker Ian Potter said this had prompted eastern counties buyers, who had been hoping for a free allocation from BS, to head into the marketplace.
“A week ago all our phone calls were from would-be sellers. Now nine out of 10 calls are from would-be buyers,” he told Farmers Weekly.
Prices had firmed from last week’s £1.80/t to a minimum £2/t, with a premium for more than 30 mile contracts. York and Allscott growers taking part in this trade with Bury, Cantley or Wissington growers also receive £7/t or £7.50/t from British Sugar, depending on distance from factory.
Duncan Clark of quota agent DCFM reported a livening trade, with volumes averaging 12,000t a day at up to £2.50/t for contracts of more than 30 miles from the East Anglian factories.
He said trade was very firm in the Newark factory area. “Newark growers are not allowed to buy contract from York and Allscott growers, as their factory is already at capacity,” he explained. “They can only trade within the Newark area.”
Since trading was sanctioned in mid-August, he said he has done about 22,000t in 38 separate deals in the Newark area. Most has been sold for £4-5/t, with no subsidy from BS. But this week DCFM claimed to have done two Newark trades at £9.50/t.
One was with a York grower who had sold his CTE to an eastern counties grower for £2/t, then received £7.50/t from BS and was using the money to get a Newark contract.
The other sale was to a grower who was 50 miles from the Newark factory and was buying from a grower in the 50-60 mile band, who would not qualify for the full transport allowance.
“This tells me that, for some sugar beet growers, there is still a margin to be made at £20/t for beet compared with other crops,” said Mr Clark.