Sugar beets: Tereos’ cooperative growers benefit from good results
20 Apr 2018 --- To help support its cooperative growers in the post-quota era, Tereos was the first group in Europe to guarantee growers a minimum price for their sugar beets and implement measures to bolster the cash flow of their farming businesses.
The estimated average price of €28.40/t incorporates the basic price, premiums paid as part of the 2017/2018 campaign, interest on shares and the payment of dividends.
Also, Tereos told its cooperative growers it would automatically reimburse excess cooperative shares unless they made a specific request. This offer has been widely taken up, with 70 percent of the cooperative growers concerned opting for and receiving full reimbursement of their excess cooperative shares, helping to sustain their cash flows.
Concerning surplus sugar beets delivered beyond contracted beets, Tereos applies a principle of compensation, partially paying for these beets at the price of contracted beets. For the past campaign, approximately 500,000 tons of excess sugar beets, equivalent to more than 25 percent of their total volume, were paid at the price of contracted beets.
For the 2018 campaign, still part of a two-year price guarantee, cooperative growers will again benefit from a guaranteed minimum price of €25/t, reflecting Tereos’ desire to protect the revenue of its cooperative growers from the effects of high price volatility during the first two years of market liberalization.
“The big challenge for us, but also the big opportunity, was to go from being a net import position in Europe to having an export situation,” says Eric Villain, Marketing & Sales Excellence Director at Tereos. “We are talking about moving huge volumes from Europe to outside and you need networks to achieve that.” For Tereos, participating with these export opportunities is key. “For us, this really goes with our value proposition, which is to be able to meet the demands of our customers not only in Europe, but more widely speaking. Basically, it requires having global supply reliability. Either in Brazil or Europe, these are large producing areas and to the export world, targeting many geographies. It is about helping our customers to grow internationally,” he notes.
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