British Sugar is planning to use any contract tonnage surrendered by Allscott and York growers to set against this season’s EU cut in sugar quota, enabling remaining growers to continue producing to their full entitlement next season.
Director of agriculture Karl Carter (pictured, right) said that BS was anticipating that up to 500,000t of the 2m tonnes of beet affected by the two factory closures would be given up, in return for the £8/t restructuring payment on offer.
This would meet the quota cut.
Another 500,000t, produced by around 40% of York growers south of the Humber, would be diverted to the Newark factory, taking it up to capacity.
The remaining 1m tonnes would most likely be traded, he predicted, being sold or leased to eastern counties’ growers supplying Bury St Edmunds, Cantley and Wissington.
“We think that, at the new prices, it should be attractive for that tonnage to move and it will not come back to us,” he told Farmers Weekly.
Brokers have suggested that eastern counties growers might pay around £3-£4/t for these contracts.
That would give Allscott and York growers a total of more than £10/t, once the £7/t BS compensation payment is taken into account.
Mr Carter added that BS remained committed to the future of the UK beet industry and would be spending some 27m over the next 12 months on its remaining four factories.
The York site would probably be dismantled, while some storage may be retained at Allscott.
BS had also notified DEFRA of its intention to purchase the 83,000t of extra sugar quota available to the UK from Brussels.