Last year, the tool was tested by a group of growers as part of a year-long pilot programme. Now, every grower supplying British Sugar has the option to allocate a portion of their tonnage to this model, provided they have beet available to contract. Growers who have already sold beet to British Sugar on multi-year deals would need to request additional tonnage to make use of this option.
This contract is the first ever that allows growers and British Sugar to price beet independently of each other. This means growers can lock in prices when it is attractive to them and British Sugar will only have to pay the price that they have independently secured.
NFU Sugar board chairman Michael Sly said: “After a successful pilot last year, I am delighted that all growers now have the opportunity to access this new pricing model. It is something we have been working hard on for a number of years, in response to calls from growers for more control over their sugar beet pricing.
“The transparency of the platform allows growers to see the value of the sugar they are growing in their crop and make independent pricing decisions based on that data.
“This can be a win-win for the industry. It will give growers flexibility to lock in attractive prices at a time to suit them and take the opportunity and risk the market offers into their own hands. Growers are familiar with this concept in many other crops, and will be aware that markets can go down as well as up.”
Jonathan Williams, Director at Czarnikow, said: “We are delighted that the NFU and British Sugar have opened up the Czarnikow pricing tool to all growers after the success of the pilot trial. It allows all growers to take their own risk management decisions for a portion of their crop. We have received very positive feedback about the ease of use of the system, and hope that growers will take advantage of the information available to decide whether it is right for them.”
British Sugar’s Agriculture Director, Peter Watson, said: “We are pleased that after a successful pilot this contract type is now available for all growers. We know some growers want to take more risk and price their own crop and this allows them to do exactly that. We’re pleased to have worked together with NFU Sugar on this innovation for our homegrown sugar industry.”
- The pricing platform has been developed by NFU Sugar, with support from British Sugar, and has been delivered by the supply chain solutions company Czarnikow (CZ). It will enable growers to take advantage of new futures-based contracts agreed between NFU Sugar and British Sugar in its latest contract offer, and will be offered via CZ’s market portal, Czapp.
- All growers have the option to put up to 10% of their total beet volume on the futures linked beet contract, provided they have beet available to contract. Growers already fully committed to multi-year deals covering 2022 would need to request additional contract tonnes to access this contract.
- The price on this contract is based on a formula directly linked to the No. 5 sugar futures market.