NFU and British Sugar settle on lower price for 2027-28 crop

Sugar beet growers face the prospect of lower returns on next year’s crop following the completion of negotiations between NFU Sugar and British Sugar.

The two sides had been at loggerheads for several months, with British Sugar triggering the arbitration process in early August. A verdict was due by the end of October.

See also: British Sugar announces plans to close Cantley factory

However, the two sides have now reached a negotiated settlement for the 2027-28 beet crop that will see growers offered a one-year fixed contract paying £28.50/t for up to 50% of the contract tonnage.

This compares with £30/t for up to 65% on the current crop, and £33/t for up to 70% on the 2025-26 crop.

Other options include:

• A one-year contract with a guaranteed base price of £25.50/t, plus a market-linked bonus for up to 100% of the contract. (The market-linked bonus will be triggered when British Sugar’s average ex-works white sugar selling price exceeds €560/t. Growers will receive 25% of the value achieved above the trigger.)
• An index-linked contract, for up to 50% of the contract. (The index-linked contract will derive its value from the No 11 raw sugar futures contract and the relevant sterling-dollar exchange rate. The contract will be calibrated to begin at £25.50/t.)

Growers can choose to split their tonnage between any of these three contract options.

Further details

The agreement also includes:

• Yield protection at a £0.9/t reduction on the fixed and market-linked bonus contract prices. (Last year this cost £1/t)
• Transport allowance paid up to 60 miles for all factories, and up to 75 miles for ex-Cantley growers.
• An interest-free cash advance option, a late delivery allowance, and complimentary frost insurance.

Fair deal

NFU Sugar Board chairman Kit Papworth said: “This has been a long, and expensive, process which I hope in future years won’t need to be repeated.

“We believe this represents a fair deal, providing options for growers with different risk appetites.”

Keith Packer, managing director of British Sugar, said: “With the sugar industry continuing to weather challenging market conditions, nobody welcomed this long delay to a contract announcement and the uncertainty it brought.

“I hope this announcement gives growers the clarity they need during this volatile period for farm businesses.”