Royal Cosun announces indicative 2006 sugar beet price
of €48.25 per tonne of quota beet from the 2006 campaign.
The price was announced during the meeting of the cooperative's members' council in Nijkerk.
Cosun has not yet set a definite price. The acquisition of CSM Suiker has still to be completed, and the Netherlands Competition Authority (NMa) is still studying the parties' licence application.
As a result, the definite price is expected to be announced in early April.
The announcement comes after the European Commission took the first steps towards a substantial withdrawal of quota sugar from the market.
The move, welcomed by EU agriculture minister Mariann Fischer Boel, is designed to avoid a significant surplus at the end of the season.
Withdrawal means a temporary reduction in the amount of sugar producers can produce under their quota. The Commission believes that a provisional figure for withdrawal of at least two million tonnes, i.e. corresponding to 12 per cent of the quota, will be necessary.
A definitive figure will be set later this year towards October, once the Commission has a "clearer picture of the harvest and production of sugar".
The new sugar reforms, which came into affect on 1 July last year, follow the general trend in European agricultural policy to decouple financial support from production. The EU also agreed last year to lower sugar production by 6m tonnes over a four-year transition period.
The indicative price for current Cosun members of €48.25 per tonne excluding VAT is payable for beet with average extractability and average sugar content. The price for the 2005 campaign had been €51.72 per tonne.
The company also said that the average sugar content (16.4 per cent) was lower in 2006 than in the previous year (16.9 per cent).
In addition, the growing season was characterised by extremes: very high summer temperatures and heavy rainfall in August. Healthy late growth in the autumn resulted in an average sugar yield of 11.1 tonnes per hectare, equal to €3,067 per hectare (2005: €3,172).
Royal Cosun is a cooperative with nearly 10,500 member shareholders. With an average workforce of 4,325, Cosun realises an annual turnover of about €1.4 billion.
