It seems that the sharply increased prices on the global sugar market also have a positive effect on growers' confidence. The French sugar cooperative Tereos – the second largest in the world – sees that its members will continue to commit themselves to cultivation in the coming years.
In a statement about the last campaign, Tereos said that 99,5% of their member growers are committed to growing sugar beets again for 5 years. That is a bit special. Not so long ago, the major European sugar producer was in dire straits. Growers are also still waiting for the final payment price.
Mud throwing within cooperative
At the height of the sugar crisis, the French were in turmoil. Tereos is the second largest sugar producer in the world after Südzucker. To gain that position, it invested in billions of dollars in debt, displeasure of the member growers. In April 2019, 8 beet growers even filed a complaint with the counter-terrorism service in Paris. They say Tereos terrorizes the farms. Tereos acted immediately by filing a charge of libel.
At the end of November there was again dissatisfaction. This time it concerned an adjustment in the penalty system, which comes into effect when a grower supplies too little. Anyone who does not comply with his obligations has a fine of thousands of euros. This approach is bad for beet growers process. All the more so because the final price for 2019 is not yet known.
Still no price
In December 2018, Tereos paid out €12,50 per tonne. Another €6,50 followed in March. The provisional price is therefore €19 per tonne. It is promised that a minimum of €25 will be paid out. Growers are still waiting for the remainder and say they have major cash flow problems as a result.
In the dark summer of 2018, the European spot price for white sugar reached a level of €300 per tonne. At the beginning of 2020, this level has risen to a top of over €400. Since the autumn, the sugar market has been able to make an international increase again and again. The result of Tereos reflects this. The cooperative presents an Ebitda result of €122 million for the third financial quarter. A plus of 135% with the period before. This is almost entirely due to the rise in sugar prices. In addition to an increase in Europe, for example, also for the ethanol market in Brazil.
Record campaign
The campaign at Tereos went well last year. On average, growers achieved a yield of 88 tons per hectare, which is in line with the 5-year average. However, the differences between growers are large due to drought and flooding: 82,1 to 91,5 tons per hectare. It rained for 100 days during the campaign, which means that not all beets have been harvested in France yet. Not yet harvested beets can be considered lost. In total, Tereos' 9 factories processed 18 million tons of beets in 125 days. That's a record.
The company also launched its first campaign for biological beets behind. Around Attin, in northern France, 200 hectares of bio beet were grown as a trial. The cooperative is very positive about that. The cultivation will therefore continue in 2020. The board is positive about the sugar market in Europe and worldwide. Both in terms of refined sugar and ethanol.
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