This summer, beet growers are likely to have the opportunity to purchase an additional 8 percent of member delivery notes (LLBs). Like previous issues, the price is 5,50 euros per 1 ton of beets. The issuance may cause the price on the free market to fall.
Cosun's growth ambition to an area of 88.000 hectares compels the cooperative to issue additional LLBs. 'Although Suiker Unie needs the beets, due to circumstances not all LLBs are used by our farmers', says Dirk de Lugt, chairman of the Board of Directors.
The reasons for this are diverse. 'There are growers who are already fairly intensive, other growers are now full, but are looking at possibilities to use their LLBs next year. Land is scarce and pressure from other industries is also increasing. The best way to persuade them is a good hectare yield', says De Lugt. For the 2016 harvest, this amounted to an average of 3.317 euros.
Nevertheless, according to the chairman, there is quite a bit of demand for LLBs and little supply. He estimates that of the millions spent, a few thousand were traded. 'LLBs are now being traded for an amount of 50 to 60 euros. The extra issuance of LLBs could drive the price down," he concludes. As of 2018, Cosun will no longer be able to take major steps in the issuance of LLBs. Further growth is limited by the capacity in the factories and in cultivation.
Read more about LLBs in the dossier.
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