3% extra allocation
Why is Cosun aiming to grow beet acreage?
For the 2018 harvest year, Cosun offers the option of increasing the allocation by 3%. This is made possible by an 8% increase in the number of LLBs (Member Delivery Certificates). The allotment rate for 2018 is down 5%. Growers who do not want to grow automatically surrender acreage.
Tuesday, June 20 reported Cosun are members about the news. The beet growers have until 20 July to respond. They can apply for a 3% increase in the allocation. If he or she does not opt for this, the allocation for 2018 will decrease by 4,5%.
4,5
percent
Consequence of previous verdict
"As early as this spring, Cosun announced its intention to increase the allocation for 2018. This is therefore the implementation of that", explains Gert Sikken, director of agricultural affairs at Suiker Unie. "Compared to this year, in which the expansion compared to 2016 is almost 20%, next year's expansion is relatively modest."
Beet sugar replaces cane sugar
"The decision is a result of the efficiency drive that has been implemented at Suiker Unie," explains Sikken. "In addition, a quantity of cane sugar was bought in the past and refined by us. That is now a thing of the past, which means we have more room for beet sugar. It is therefore not the case that, due to the expansion, more sugar will be brought onto the market by Cosun. ."
Europe has no influence on the world sugar market
Sikken is aware of the questions that growers have. Is a major expansion a good idea? Less production means more demand and higher prices, right? According to the agricultural director, that fork is different: "As Cosun, we cannot influence the world sugar market. Things such as climate change, weather extremes and exchange rates have a much greater impact on this. If India harvests less cane sugar, they import millions of tons extra. sugar. If the Brazilian economy is bad, you will see that reflected. Arable farmers do not have to fear a situation such as the dairy farming industry has known.
Satisfied grower punished?
Whether it is wise to grow depends on the business situation, according to Sikken: "We see a lot of companies that would like to expand even more. Others are fine with it. The decision to grow more sugar beets, or not, should depend on your business situation. and your building plan."
Aren't growers who don't welcome the 3% allocation penalized? Those who are satisfied with their current acreage will automatically shrink by 4,5% in 2018. After all, the allotment percentage will go from 112% to 107%. Sikken: "The increase in the number of LLBs by 8% and a reduction in the allocation percentage by 5% reflects Cosun's policy of balancing the number of LLBs with the sales opportunities. fine tuning."
Beets from abroad
Something will change for beet growers who occasionally grow sugar beet in Belgium or Germany. That may be the last time this year. "Cosun uses 8 transport zones, which translates to a maximum distance of 90 kilometers from the factory for areas in Belgium and Germany. There are some foreign regions that are included, but some are not," explains Sikken. "Especially in the area of formerly CSV-Covas, growers cultivated sugar beets across the border, which now fall outside the 8 zones. This year, these beets are still being collected. Next year, the loading location must fall within the zone. A grower is therefore allowed." growing beets outside the zones, as long as he takes the beets himself to a loading location within the zone."
Loyal Members Exception
There are a few downsides to the rule change. If a beet grower supplies sugar beets from abroad for more than 8 years, then leniency applies. "We have members who have been growing sugar beets abroad for 50 years and supplying them to us," says the beet man. "This will continue to be honored and the costs for transport will be passed on to the grower, as is already the case. We do look at whether the company cultivates on its own land, long-term leased land, or whether it takes place incidentally. The group growers to whom this change applies is not large. I estimate between 10 and 20 members. It was a collective decision from the members' council, which was taken earlier that year. Members of CSV-Covas are used to having their beets loaded with a beet mouse. This entails additional costs compared to a crane, but the collective takes care of this. For example, it has been decided within the cooperative. If a change is desired, this is first discussed with the members. no reason to."
What do you think of Cosun's decision? Is growth the key to success, or does it result in a reduction in the beet balance? Have your say in the comments below!
Niels van der Boom
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