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Variable contract to be offered to sugar growers

A year-long pilot scheme is taking place on a new platform for sugar beet growers

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Variable contract to be offered to sugar growers

Sugar growers will be able to ‘take the opportunity and the risk’ of the markets into their own hands following the launch of a sugar beet pricing platform.

 

The platform, developed by NFU Sugar with British Sugar support, and delivered by supply chain service company Czarnikow, will allow growers to manage and fix their own price.

 

Platform

 

The platform would be tested in a year-long pilot by a group of growers before being rolled out more widely.

These growers have the option to transfer up 10 per cent of their tonnes to the variable priced contract, with the price set by a formula directly linked to the No. 5 sugar markets.

 

Delivery of the sugar beet remains governed by the grower’s contract with British Sugar and the pricing formula is unrelated to the delivery date.

 

NFU Sugar board chairman Michael Sly said it was a ‘hugely exciting project’ and had been done in response to calls from growers for more control over their price.

 

“In the pilot, growers will be able to see the live value of the sugar they are growing in their crop for the first time ever and make independent pricing decisions based on that data,” he said, adding it could be a ‘win-win’ for the industry.


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Jonathan Williams, Director at Czarnikow, said: “We are delighted to be a part of this innovative pricing structure for UK growers.

“It has taken a lot of hard work and creative thinking from NFU Sugar and British Sugar to allow us to launch the project this month and we are confident growers and British Sugar will both benefit by taking direct control of their own price management.

"Independent pricing is here to stay, and it’s only going to increase in volume and sophistication in future years.”

British Sugar’s Peter Watson said: “British Sugar recognises the desire in some growers to take more risk and price their own crop.

"Together with the NFU we believe we have developed a new contract type to allow this to happen.

"This years’ pilot scheme is truly innovative for the sugar beet sector with growers able to take positions on the sugar market for a proportion of their crop, much in the same way as other cereals crops. An exciting opportunity for all in the future.”

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