Royal Cosun expects the beet price for 2018 to be approximately €5 lower than that paid out in 2017. This is what Dirk de Lugt, chairman of the board of directors, said on Thursday 8 February at the presentation of the annual figures in Breda. Where it was also announced that the cooperative has equity of € 1,2 billion.
De Lugt expected that the price in 2018 will be lower than the €45,62 per tonne that the cooperative paid out in 2017. "I expect that we will just reach the €40 per tonne, or perhaps not at all. In any case, we will remain above the base price of 2017 (€32,50 per tonne)."
The members' surcharge that applies in 2017 on top of the basic price will be €14,75. More than €5 of this comes from the profitability of the subsidiaries Aviko and Duynie. The beet price received by arable farmers in other European countries, such as Germany and England, is between €25 and €30 per tonne of beet.
Equal area
Cosun assumes an area of 2018 hectares of sugar beet for 86.000, which is the same as in 2017. However, the cooperative has issued 8% more LLBs (membership certificates). According to Cosun, a lively trade among farmers can be detected in these LLBs. De Lugt: "The market value of 1 LLB is currently €40 to €50. These are significant amounts and indicate how much confidence sugar beet growers have in the future of this crop."
A member's delivery note gives the right to deliver 1 ton of beets (with 17% sugar) at the member's price. A membership receipt costs €5,50 when issued by the cooperative.
Shift area
Cosun is currently dealing with a shift in acreage to the north-east and south-east of the Netherlands, at the expense of Flevoland. Cosun cannot say how much it is. The shift has to do with the expansion of organic crops in this region.
Jan Willem van Roessel, secretary of the board of directors: "We do not have a processing line for organic sugar. We are looking at this, because this market is growing. However, the volume of organic sugar is small and does not fit within the processing lines of our factories. are far too large for that.”
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Extremely low sugar price
The predicted fall in beet prices for 2018 has everything to do with the extremely low sugar price. According to Cosun, the average European sugar price in December is €410 per tonne of sugar. That is almost equal to the reference price of €400 per tonne. Last year around this period, European sugar still cost about €500 per tonne.
These low prices are the result of greater sugar production in relation to consumption. Customers are more often than before enforcing multi-year contracts, because the sugar price is so low. Cosun states that almost all sugar for 2018 has already been sold.
Market must reset itself
It is true that worldwide sugar consumption is growing by 1,5%, but in Europe consumption is declining. The increased production is the result of the expansion of the acreage, the favorable weather conditions and the disappearance of the sugar quota.
According to Albert Markusse, chairman of the board of directors, the sugar market will need a number of years to recover. "The European sugar market will be more strongly influenced by the world market. We are already seeing that." He expects that the beet acreage in Europe will decrease in the coming years and that a number of sugar factories will be closed.
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