New one-year sugar beet contract agreed for 2022

NFU Sugar and British Sugar have today announced a one-year sugar beet contract from 2022
NFU Sugar and British Sugar have today announced a one-year sugar beet contract from 2022

The 2022 sugar beet contract offer has been agreed upon, including the continuation of the Virus Yellows assurance fund and futures-linked contracts.

The one-year contract for 2022 will pay a fixed price of £27 per adjusted tonne, NFU Sugar and British Sugar confirmed on Wednesday (22 September).

Current multi-year contracted growers will have the option to upgrade to a fixed £25 per adjusted tonne by contracting for an additional contract year.

There will be no separate market-linked bonus, both organisations said. These prices are on a zero-crown tare basis, meaning growers are paid for the entire roots of beet they deliver.

In addition, NFU Sugar and British Sugar have agreed to continue the Virus Yellows crop assurance scheme, which was first introduced in 2021.

This will continue to compensate growers for a proportion of yield losses suffered where a grower has VY present in their crop.

This is a three-year £12 million fund underwritten by British Sugar covering all new and existing contracts, and there are no changes to the terms and conditions.

The futures-linked variable priced contract will also continue for 2022, giving growers the ability to make their own pricing decisions for a portion of their contract.

This will now be open to all growers, who will have the option to allocate up to 10% of their tonnage onto this contract.

Also new for this year is a local premium for all growers up to 28 miles contract distance from their nearest factory.

This will start at £2/t for growers up to nine miles, and then reduce on a linear scale down to 10p/mile up to 28 miles.

NFU Sugar board chairman Michael Sly said that following another difficult negotiation, the union had managed to agree terms with British Sugar.

"The substantial increase in the one-year contract price reflects the increased costs and risk sugar beet growers now face and recognises the fact that sugar beet must offer returns comparable with alternatives," Mr Sly said.

“After a successful pilot this year, the futures-linked variable priced contract will now be available to all UK sugar beet growers.

"This contract offers both growers and the processor the potential to lock in attractive prices, meaning all parties can benefit from it.

"Other countries around the EU are starting to follow our lead on this and I am sure that this type of contract will become increasingly common as EU countries modernise their thinking and practices.”