Sugar beet prices will rise sharply throughout Europe for 2022 and 2023. Sugar products have been able to capitalize on the greatly improved sugar market and that is reflected in the beet price for growers. Price increases of 40% are therefore not uncommon. That's what European factories do with their contracts?
The rate is also increasing in the Netherlands beet price significant, although the final result will not be known until early next year. A price of €52 per ton – as is now expected – means an increase of at least 30%. Such percentages are also expected by other European beet processors.
France: Tereos and Cristal Union
Sugar producer Tereos – the largest in France – is going one step further and is offering a price that will be 40% higher in 2022 compared to a year earlier. The cooperative growers were told in mid-October that the organization will pay out €41,85 per tonne of beets (at 16% sugar) in 2022. This includes premiums. Last year the price was a disastrously poor €29,90 per tonne. Cristal Union presented a minimum price of €35 per ton earlier this year, which will increase to €40 in 2023. Both cooperatives have a good reason to offer their growers a profitable price. The French farmers contractually commit themselves to a cultivation period of five years. Half of these contracts expire in 2023. The yield of next season's cultivation therefore partly determines French beet cultivation up to and including 2027.
In addition to the two cooperatives, France also has a number of private beet processors such as Sucrerie de Souppes and Lesaffre Group. Saint-Louis Sucre – a subsidiary of Südzucker, previously announced a guaranteed price of €35 per tonne, and has now increased the forecast for the expected final price to €43.
Germany: Südzucker, Nordzucker & Pfeifer & Langen
The German cooperative beet processors cannot yet take stock of the current processing year. At the beginning of this year, both came with an expected minimum price of €40 per tonne, which, given developments on the sugar market, will be achieved without major problems. Pfeifer & Langen has different price systems for their growers. The fixed contract for the 2022 cultivation year is €40 per tonne. A flex contract - which moves with the sugar market - is good for as much as €55 per tonne in mid-November, the company said. Cosun Beet Company, active with one factory in Anklam, North Germany, has also previously promised a minimum price of around €40.
Belgium: Tiense Suiker & Iscal Sugar
Tiense Sugar Refinery – also a subsidiary of Südzucker – has announced a guaranteed price of €38 per tonne (at 18% sugar!) for this season, which already happened at the beginning of this year. The additional payment will not be made until the middle of next year. According to the Confederation of Belgian Beet Planters (CBB), the amount could ultimately rise to €50 per tonne, including pulp compensation. For next season, Tiense Suiker has kept the minimum price the same as this year.
Competitor Iscal Sugar has linked the payment price to the sugar market. Iscal says it sold the sugar for an average of €700 per tonne or higher. For growers, this corresponds to a price of €45,90 per tonne at 17,5% sugar and excludes the pulp payment. In the meantime, CBB is consulting with Iscal Sugar about pricing for next year. They demand a higher price, which the processor has not yet agreed to. This means that the result next season will be only one euro per ton higher, or in the extreme case €3,34, if sugar prices rise even further.
Poland: Polski Cukier, Nordzucker, Südzucker & Pfeifer & Langen
Poland – one of the largest European sugar producers – has directly linked support for beet cultivation from the CAP. The exact amount is determined annually by the European Commission and depends on the exchange rate between the euro and złoty. In 2022, growers will receive 1.807 złoty per hectare, equivalent to €385. Last year that was €330.
Polski Cukier (Krajowa Grupa Spożywcza) will pay out €46,46 per tonne this year. At Nordzucker, the price fluctuates between €39,43 and €42,54 per tonne, depending on the type of contract. Züdsucker pays €44,21 (€50 at 18% sugar) and Pfeifer & Langen has the highest price this year at €47,57 per tonne. All these prices are based on 16% sugar.
These are decent prices in European terms. Next year, Pfeifer & Langen will increase the price further, to €48. This means that the price level is still below what is offered in Germany. Nordzucker will increase the one-year and multi-year contracts next season by €6 to a minimum of €41 to €42,10. The other processors have not yet mentioned prices.
United Kingdom: British Sugar
British Sugar in England traditionally pays one of the lowest beet prices in Europe. This is no different today. It is one of the reasons why the acreage on the island has decreased considerably. In ten years, cultivation decreased by more than 11%; from 104.000 to 92.100 hectares. For this year, the sole beet processor, British Sugar, will pay €30,90 per tonne for both the contracted tonnes and the surplus beet. Growers who have signed a 'market contract' – where the price is linked to the sugar market – can expect an extra €6,66 per ton of beet.
British Sugar will increase significantly by 2023, to £40. That is the equivalent of €45,78. This floor also applies to multi-year contracts, in which €36,62 is currently paid out. For British growers, the increase of 48% is a welcome boost, but compared to other European countries, the British beet price remains relatively meager.
Conclusion
Without exception, European beet processors have been able to benefit from the significantly higher sugar prices. In the summer, the European sugar sales price was €700 per tonne, after which €100 per tonne was added every month. This caused the price to rise from €700 to €1.000 in September, writes CBB chairman Bruno de Wulf. At the same time, the processing costs of beets for factories have also increased significantly. In 2020 these amounted to €25 per ton of sugar, which was already €75 a year later. This amount is expected to more than double this year. Growers are also seeing their costs rise considerably, making a 40% higher beet price essential to keep it competitive compared to grain.