British Sugar is offering a new forward index-linked contract option, giving growers the chance to contract some of their beet tonnage for the 2027/28 season in advance of annual beet price negotiations.
The ability to market on a longer-term basis has been created by NFU Sugar, British Sugar, and the agri-commodity and supply chain experts Czarnikow (Cz).
For the past five years, beet growers have had the option to contract and price some of their beet on a ‘one year’ contract indexed to world sugar prices.
The aspiration has always been to offer a contract that growers can transparently view and sell against a forward market price for sugar beet, as with other crops. crops.
The existing one-year contract allows growers to do this but is limited to pricing beet one year ahead and requires a grower to contract tonnage well before being able to lock in a price. The idea of the forward index-linked contract is to give growers the opportunity to price their beet further into the future.
According to British Sugar, forward pricing will work in a similar way to any other crop – growers will be able to see a forward price, but, unlike the current one-year contract, a grower only commits to sell at the point they want to price the beet. If the price is unattractive, there is no compulsion for growers to contract.
NFU Sugar Board Chair Kit Papworth said: “Farmers are used to being able to forward sell other commodities and this pilot allows growers to do the same for sugar beet. While world prices are low now, the market is highly volatile, and this scheme will allow growers to lock in prices if market conditions become attractive.”
