British Sugar will look to offer long-term deals to sugar beet producers again
British Sugar will look to offer long-term deals to sugar beet producers again, according to managing director Paul Kenward.
Speaking at a commodity seminar looking at ‘new ways to improve transparency in the UK sugar beet supply chain’, Mr Kenward’s comments came after Anders Lindkvist, secretary general of Betodlarna, the Swedish beet growers’ association, explained how Swedish growers are offered a choice of one to four year contracts and a separate choice of fixed or flexible prices.
“One of the most popular things a processor has ever done is offer a long-term deal,” said Mr Kenward. “I would love to explore that. We will again look to offer a long-term deal. We really want to offer growers choice, so they can choose a model that fits their farm economics and business.”
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Flexible
Sweden grows all its sugar beet for private processor Nordic Sugar and the flexible pricing structure offered to growers is based on the annual earnings before interest, tax, depreciation and amortisation (EBITDA) of the company, which are made public each year to promote full transparency.
Michael Sly, chairman, NFU sugar board, who was also on the panel, admitted that would not be possible for British Sugar because it is more complex as a division of a multinational company.
Current beet prices in Sweden are some of the highest in Europe at £24/tonne in 2019 and yields average 64t/ha.
Mr Lindkvist said: “The Swedish mentality has an effect on negotiations, once an agreement is reached we stand shoulder-to-shoulder in improving and defending the Swedish sugar sector.”
Dissatisfied
However, Mr Lindkvist admitted that despite the high prices, there is still dissatisfaction amongst growers surrounding haulage and transparency of seed prices.
Mr Kenward, who said he was struck by how much the UK has in common with the Swedes, said: “The revenue British farmers gets per hectare compared to a Swedish farmer is £300 higher. I think it has to continue to be an attractive crop for farmers.”
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