Demand for sugar drives up beet price
The past 12 months have seen a sharp increase in the cost of raw sugar on world markets. While sugar was being traded for €580/t in 2005, prices have increased steadily on the back of stronger global demand and has now hit more than €1,150/t.
This improvement in sugar prices has also been reflected in better returns for sugar beet growers.
While the base price for A quota sugar beet is now €26.29/t, growers in Germany are making well over this figure.
German tillage farmer Theis Kruse is receiving €35/t for A quota sugar beet this year. A price for C quota supplies has not yet been set but there is strong demand for beet, and processors have told growers that much of the C quota beet will make A quota prices. Last year Mr Kruse received just €20/t for C quota.
The Kruse family farm is in the county of Dithmarschen, on the western coast of Schleswig-Holstein province in northern Germany, 50 miles north of Hamburg.
Although margins from sugar have been variable for the last few years, Mr Kruse insists that it remains a profitable crop. A lot of German growers have given up their quotas over the last few years and switched to wheat production, but processors are offering a 15pc increase in grower contracts this year in order to secure more beet.
The price being offered for this additional beet is on a par with that being offered under the official grower quota contract. Demand for beet for biogas plants has also opened up an alternate market for German sugar beet growers.