UK sugar beet growers to receive first ever market-linked bonus pay-outs
Sugar beet growers across the UK are set to receive a market-linked bonus later this year, after EU average sugar prices hit the trigger point for the first time.
In April, the reported market price for white sugar reached €379/t, which is above the reference point of €375/t that triggers a bonus for UK sugar beet growers who had tonnage on a one-year contract with British Sugar for the 2019-2020 crop.
British Sugar’s agriculture director Peter Watson commented: “Although the 2019-2020 market-linked bonus will be a relatively small premium this year, we’re pleased to see the mechanism triggered for the first time since it was introduced three years ago.
“We know that last year’s campaign was difficult, with unprecedented weather conditions, so it is welcome to be able to share the upside of the market with our growers.”
How much will it benefit growers?
It is expected that around two-thirds of UK sugar beet growers will receive the bonus.
British Sugar’s contracts with growers offer a market-linked bonus mechanism, triggered if the reported market price for white sugar reaches a certain price.
For 2019-2020 one-year contracts, if the reference price reaches €375/t, growers will receive a 15% share of the value above that point.
As well as producing sugar, British Sugar’s factories produce a wide range of co-products including animal feed, electricity and bioethanol.
British Sugar is a subsidiary of Associated British Foods. The company’s output is sold to consumers in the UK under the Silver Spoon brand and under many supermarket own-label brands.