Sugar beet farmers and the sole buyer of their produce British Sugar have agreed on a contract price for the 2025/26 crop – avoiding the acrimonious pricing dispute that dragged on for six months last year.
Farmers, represented by the NFU, and the Associated British Foods-owned sugar processor have agreed on a price of £33 per tonne for 70% of their crop for the one-year fixed price contract option.
A one-year contract with a guaranteed base price of £30.70 per tonne, plus an “improved” market-linked bonus is also available, as is a futures-linked contract for up to half a farmer’s crop.
Growers could choose to split their tonnage between any of the three contract options, in what the NFU and BS described as contracts that recognised “the importance of choice and flexibility”.
Other pricing options were also available, including an enhanced yield protection offer for a reduced contract price of £31.60 per tonne for the fixed price option, or £29.30 per tonne for the market-linked bonus and futures options.
However, the core price was significantly down on the £40 per tonne fixed price for the current 2023/24 contract finally agreed in December, which reflected the current downturn in global sugar markets, according to British Sugar MD Keith Packer.
NFU Sugar board chair Michael Sly said he was “pleased” the two parties had come to a “timely agreement”.
The offer represented “a fair deal in the context of the global sugar market. Importantly it provides growers with a range of choices dependent on their appetite for risk”, he added.
“The yield protection acknowledges the continuing threat of virus yellows disease and likelihood that the industry won’t be granted emergency use of Cruiser SB [an insecticide] in 2025,” Sly said.
“This year’s contract offer to growers has been created in partnership with NFU Sugar,” added Packer.
“Over the last few years, we have learned how important flexibility and choice is to our growers and have therefore made sure these are at the heart of this year’s offer,” he said.
“Whilst the core price reflects the current downturn in sugar markets, we have built in mechanisms which mean growers will share in any potential upside. This means if sugar markets do well, we all do well.”
Last year’s dispute ultimately led Defra to intervene, after British Sugar incensed the NFU by making direct approaches to farmers – in contravention of well-established negotiating practices.
Any failure to agree on contract terms could have led many growers to ditch the crop and force BS to import raw cane sugar to fulfil its sugar supply obligations – a scenario that could ultimately have pushed up prices for the input, affecting a host of food and drink categories.
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