The futures-linked contract allows growers to make flexible beet pricing decisions in real-time based on the world sugar price, exposing them to the risks and rewards of global commodity markets.
Key dates
The pricing period will commence once you have completed the contracting process with British Sugar, signed the novation agreement with Czarnikow and set up an account on Czarnikow鈥檚 platform, Czapp. The novation agreement is now available on the British Sugar contracting portal to help speed up this process.
For the 2025/26 crop, the final day you can price your beet will be 29 August 2025.
Beet pricing
The beet price at any given time will be displayed on Czapp. It is based on a formula that starts from the price available on the Oct-25 ICE Sugar No.11 Futures market, converts into 拢 sterling, subtracts a fixed factor and divides that figure by 6.25 to generate a beet price derived from the sugar market.
NFU Sugar and British Sugar have agreed that Czarnikow will derive the fixed factor once the sign-up window closes, by taking a position in the market to ensure the cost of the beet to British Sugar is 拢30.70/t when the pricing window opens.
Any beet not priced on or before 29 August 2025 will be priced automatically at the price available that the following day (1 September 2025).
Beet will need to be priced by 1 September 2025 in order to ensure each grower鈥檚 beet value on this contract is known prior to the campaign. As campaign and delivery dates are liable to change, the 1 September date ensures the pricing process will not be impacted by the campaign.
Effect of USD to GBP FX rate
The price quoted to you via Czarnikow鈥檚 online portal CzApp will be in GBP/t beet so the USD/GBP FX rate will impact final beet prices. Prices will change regularly depending on the value of the Oct-25 ICE Sugar No.11 Futures market and the forward USD/GBP exchange rate at any moment in time.
Growers will however be guaranteed to receive the price they see on the pricing platform when they choose to execute pricing. That price will be fixed.
The novation agreement
If you choose to sign the novation agreement, then this will become a binding contract. The beet will still need to be physically delivered to BS under the standard terms of your contract pack, but the pricing of that beet will now be executed via Czarnikow.
Payment
You will be paid within 24 hours of British Sugar鈥檚 standard payment terms. British Sugar will make payment to Czarnikow under the same standard terms as for other contracts, and Czarnikow will pay you for this beet within 24 hours of receipt of funds from British Sugar.
The payment for beet value on this contract will come from Czarnikow within 24 hours of British Sugar鈥檚 standard payment terms. Czarnikow will provide an invoice and confirm the value achieved. This will be available to Growers via Czarnikow鈥檚 app (CzApp).
You will also receive a beet invoice as usual from British Sugar, with a 鈥榥il鈥� value attributed to the beet on this contract, but all other payments (LDA, transport allowance, payments for beet on other contracts, BBRO and NFU levy deductions) will come directly from British Sugar as usual.
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CTE (Contract Tonnage Entitlement) allocation
A limit of up to 50% was agreed between the NFU and British Sugar and has grown steadily from an initial 10% during the pilot year in 21/22. The limit at this point assists in reducing growers鈥� exposure to the risk of failing to deliver against this contract.
The contract can only be signed up to in 50 tonne parcels, so given the requirement to put no more than 35% of your CTE onto the 2025/26 futures-linked contract, you must hold a minimum of 100t of CTE to participate this year.
Trades must be executed in minimum 50t parcels so that appropriate volumes can be accumulated for execution on the market. There would be no daily limit, the only restriction being the total volume committed by you under this pilot.
NFU Sugar position
Whether or not you choose to put a portion of your beet on this contract is completely at your discretion. 皇家华人does not give any endorsement or recommendation regarding the options contained within the contract offer.
Potential risks
Remember that you have made a commitment to British Sugar to deliver the agreed tonnage and you are responsible for meeting this requirement in full regardless of the price(s) that you receive for the beet. Please consider the risk of under-delivery, if (for example) your crop fails to grow or cannot be sold due to contamination or disease. In such circumstances, CGL may seek a lump sum payment from you if you have committed a certain tonnage to their flexible pricing structure which you can no longer honour. British Sugar may also impose a financial penalty if the agreed tonnage set out in the Contract Pack is not delivered.
The index-linked contract price means that the price of the beet will change over time until you make use of the hedging arrangements offered by CGL to fix a particular price. Markets change constantly due to various factors, and the price will go up and down over the course of the time that you engage CGL. This means that there is no guarantee that the flexible pricing option will result in you generating more income from this option instead of continuing with the current fixed price approach offered by British Sugar.
You may want to consider taking out suitable insurance cover to protect against crop failure and contamination. Please contact your insurance provider to explore what options might be available to you.
There is a 鈥渃ounterparty risk鈥� that CGL may face financial difficulties of their own (e.g. insolvency) which could result in them not being able to honour their pricing arrangement with you. Please note CreditSafe lists Czarnikow at very low risk.
If you don't deliver all of the tonnes you've priced through the futures contract, the risk of this happening has been minimised by the limit to the CTE an individual grower can put on this contract. Furthermore, British Sugar will allocate the first beet you deliver against this contract, meaning that even in a case of severe yield loss you are unlikely to underdeliver against this contract, provided you plant enough crop area in the first place. However, in the event that you still weren鈥檛 able to deliver your beet priced under the novation agreement then there could be a financial penalty linked to Czarnikow having to close out ICE Sugar No.11 Futures and USD/GBP positions that had been established to provide you with your final pmt beet price.听
Market analysis
Any pricing decisions are strictly for each individual grower. Czarnikow will provide some market analysis on CzApp, but this does not constitute pricing advice. Access to CzApp analysis can be provided to all growers whether or not participating in the futures linked contract this year.
Global sugar supply and demand dynamics will affect the price evolution and direction of the ICE Sugar No.11 Sugar futures market.
Furthermore, NFU Sugar may circulate sugar market analysis from various sources, but does not endorse any particular provider of market analysis nor will this in any event constitute pricing advice.
Following demand from Sugar beet growers, for the 2024/25 season and going forward, Czarnikow has added new functionality to the CzApp beet pricing tool. Growers will now be able to set multiple price alerts as well as orders to sell some or all of their futures linked beet if a certain price level is reached.
You will not be able to re-buy and sell again. Once you fix the price, that parcel of beet will have been fixed and you will not be able to unwind and reprice at a later date.
ICE Sugar No.11 Futures and USD/GBP FX are volatile markets making the potential range for highest and lowest likely prices fairly wide. For comparison, potential beet prices on the 2023/24 futures linked contract varied by nearly 拢30/t between the highest and lowest possible values a grower could have achieved.
Czarnikow app training
Czarnikow have in the past arranged training sessions for those growers who have novated contracts in order provide CzApp training and to answer specific questions around the sugar beet futures linked contract. This normally held around the 鈥榞o-live鈥� date.
AB Sugar
AB Sugar has owned shares in CGL since 1991. CGL act as a totally independent company, working with numerous producers and multinational sugar consumers worldwide. Your pricing with Czarnikow will be entirely independent of British Sugar鈥檚 pricing, meaning that neither party will see the price achieved by the other. Czarnikow operate separately from British Sugar, so confidential information such as pricing will not be shared.