Outlook 2018: Loss of neonics threatens sugarbeet production

The start to the 2017 crop has been mixed, but many crops improved after June rain and indications so far suggest a reasonably large crop overall.  

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“The contract value of bonus over and above the base price is driven by the sugar marketing period from October 2017 to September 2018,” says Mr Blake. “World prices are falling from the four-year high of December 2016, but the EU June 2017 price was quoted at €498/t.

“If the price were to remain at this level, then we calculate that 32p would be added to the one-year contract, and 81p to the three-year contract.”

The ability for existing three-year contract holders to roll forward their commitment for the next three years (effectively tying them in for four consecutive years) was a useful option for growers for 2018, providing an extra 50p/t.

At the time of writing it is understood that contracting is not yet complete, with BS looking for additional area for 2018.

Earlier this year, plans were announced by Al Khaleej International Ltd for a project to invest in a new sugar factory in Yorkshire, the first in the UK for around 90 years, expected to process 24-26,000t/day during the campaign.

This could bring a new entrant to the market, but due to its location it is unlikely to provide sufficient competition to result in a significant increase in price, as demonstrated with AD sugar beet in the East, says Mr Blake.

“However, there are ways to attract growers other than price,” he adds. “Current payments terms offered by British Sugar add cash flow certainty, a recognised benefit.

“Haulage and harvesting arrangements, co-ordination to suit crop and soil conditions, and delayed payment terms for seed could also be useful incentives.”