Contract conditions for sugar beet from 2018 settled

Nordzucker and DNZ conclude negotiations

24-Apr-2017 - Germany

Nordzucker AG and trade association Dachverband Norddeutscher Zuckerrübenanbauer e.V. (DNZ) have agreed on the terms of the beet supply contracts for growing years starting in 2018. Beet growers are again offered various options. All the contracts will be published shortly on the Agri Portal.

Farmers can choose between three contract models: A three-year contract with a variable price is new. A one-year contract with variable and fixed price models is also an option. A three-year contract at a fixedprice is not being offered this year.

Compared with the variable one-year contract, the price level of the variable three-year contract is EUR 2 per tonne higher. At a sugar price of e.g. EUR 450 per tonne of sugar, the beet price would be EUR 33.90 per tonne.

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The one-year models offer the same price level as in 2017. The fixed price is EUR 29 per tonne. In the case of the variable price model and an assumed sugar price of EUR 450 per tonne, the beet price is at a level of EUR 31.90 per tonne.

All prices include all ancillary services and are based on Nordzucker’s five-year average sugar content of 17.9 per cent, a payment of EUR 3 for beet pulp and average compensation for early and late deliveries of EUR 1.30 per tonne of beet.

All offers apply to contract quantities from delivery rights and “free volumes”. If the free volumes are oversubscribed, Nordzucker AG will assign according to economic criteria. A maximum free volume of one million tonnes is guaranteed for the Klein Wanzleben and Nordstemmen sugar plants’ catchment areas.

“With the negotiating compromise reached, we are at a similar level as in the previous year. The actual final beet prices will be decided in the markets. As far as we are able to make estimates today, we are optimistic”, said DNZ chief negotiator Hans-Heinrich Philipps of the result. Nordzucker Chief Agricultural Officer Dr Lars Gorissen emphasizes: “We are offering our beet growers a contract package with attractive conditions that accommodates both the interests of growers as well as the new market requirements. In particular, the three-year contract with variable price allows long-term planning with simultaneous market orientation.” DNZ chairman Helmut Bleckwenn also expressed satisfaction, concluding that “Reliable marketing partners and early contract offers are becoming ever more important after discontinuation of the quota system.”

Some 6,000 sugar beet farmers will shortly receive detailed and comprehensive information about the terms of the contracts. It will be possible to sign the contracts in the AgriPortal from the beginning of May, where the free volumes can also be requested and the contract volumes split between different price models. The contract volumes issued by Nordzucker will in all likelihood be somewhat higher than in 2017. The final factor for the delivery rights will also be published with the contract offers.

https://www.yumda.com/en/news/1151137/contract-conditions-for-sugar-beet-from-2018-settled.html