1 October 1999

Low white sugar prices & strong£ hit beet payments

SUGAR beet growers have been hit by a series of price cuts triggered by weak world sugar prices and the strong £.

A glut of raw sugar has pulled world white sugar values down to about £120/t, compared with £150/t this time last year, notes BSs Robin Limb.

"As a result, the final payment on last seasons C beet (due in November) will be £2.70 an adjusted tonne," he estimates. That takes the final price to about £10.60 an adjusted tonne, 27% less than last year and the lowest for at least a decade.

Growers will also have to repay about 15p an adjusted tonne on all contract tonnes delivered in the 1998/99 season to help cover higher export subsidies now needed for surplus EU quota sugar to compete on the depressed world market, says Mr Limb. This puts the final A/B price at about £32/t, a fall of about 50p on the season.

Meanwhile, the strong £ is to blame for this seasons lower interim A/B price. British Sugar will pay £28.80 an adjusted tonne, 61p less than last year. Transport rates, set in k, will be cut by a corresponding amount, to £3.22 an adjusted tonne for an average 26 mile journey, says Mr Limb.

There is a marked rise in the NFUs rhizomania compensation levy to 8.8p an adjusted tonne, from 1.2p, to cover the increasing number of outbreaks. "We had a rather large pay-out this year," says Matt Twidale, NFU sugar beet committee chairman.

Both he and Mr Limb expect the new rhizomania stewardship scheme, which will allow affected growers to transfer tonnage to other producers next season, to reduce this levy.