Growers can now manage and fix their own sugar beet prices following the launch of the first ever sugar beet pricing platform.
The pricing platform enables growers to take advantage of new futures-based contracts agreed between NFU Sugar and British Sugar in its latest contract offer. It has been developed by supply chain service company Czarnikow.
Offered via Czarnikow’s client platform, Czapp, the platform will initially be tested by a pilot group of growers as part of a year-long pilot programme. The intention is then to roll it out more widely across sugar beet contracts.
The pilot will allow growers and British Sugar to price beet independently of each other for the first time ever. 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 set.
NFU Sugar board chairman Michael Sly said: “This is a hugely exciting project and 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 price.”
Growers will be able to see the realtime value of the sugar they are growing in their crop for the first time ever. They will then be able to make independent pricing decisions based on that pricing data.
Mr Sly said: “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 them into their own hands.”
Czarnikow director Jonathan Williams said the pricing platform had taken a lot of creative thinking from NFU Sugar and British Sugar. Growers and the processor would 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,” said Mr Williams.
British Sugar agriculture director Peter Watson said the processor had recognised the desire in some growers to take more risk and price their own crop. The new contract agreed with NFU Sugar would allow this to happen.
“This year’s 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.”