News Sugar beets
What will the 2019 beet price be?
On Wednesday 12 February, Royal Cosun will announce the final sugar beet price for the 2019 harvest year. Last year, Suiker Unie made a loss for the first time in its history. The subsidiaries, however, limited the price decline. Could a more positive story be possible this year?
Three important things play a role, which we explain below. Just like last year, Cosun uses a price of €32,50 per tonne of beet with 17% sugar as a base price. However, the question is: where does the members' bonus come from, which largely comes from the subsidiaries: Aviko Potato, Sensus, Duynie and SVZ? Last year a final result of €35,59 achieved.
1. Positive result subsidiaries
Aviko Potato has increasingly become a very important pillar within the Cosun group. Certainly when the sugar price falls sharply, the result from the potato branch partly compensates for this loss. Aviko reportedly achieved excellent results in 2019. The potato price for the 2018-2019 season was therefore very high, as was the worldwide demand for chips. Aviko profits from this. The other companies also did well.
2. Improved sugar price
Both the sugar price in Europe and the global price have now left their lows far behind. In the summer of 2018, the European spot price was €300 per tonne. At the beginning of 2020, that will be more than €400. The international market has a healthy demand for sugar for consumption and processing into ethanol. Lower production in sugar cane countries is pushing the world towards a shortage, which pushes up prices. Did Suiker Unie sell early, at a low world price, or was it hesitant? This largely determines the end result for the grower.
3. Difficult growing season
The campaign, unlike in 2018, was very wet from start to finish. Especially in the clay areas. A capricious growing season marks the harvest. The spring started uncertain, with the lack of neonicotinoids. Especially in the southwest, beet fields eventually turned a bright yellow, which certainly costs sugar. Percentages were remarkably low in all regions. When, after a hot and dry summer, the beets started growing again in September, it cost sugar. The autumn weather also did not contribute to sugar formation (lack of cold nights and warm days). The base at 17% is a challenge for many growers.
Niels van der Boom
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