Experts confirmed that the increase offset rising corn costs in Europe, after the firm announced its performance for the period ending December 31.
Clive Black, an analyst at Shore Capital, said: “In Europe, an increase in the reference price for iso-glucose, driven by strong sugar prices, has more than offset increased corn costs.
“As usual with the Tate & Lyle business model, management has reported a range of plusses and minuses through the period. Though increased visibility on the outcome of the annual sweetener rounds leads us to upgrade our consensus 2012/13 forecast.”
Corn sugar margins
Tate & Lyle confirmed that negotiations for the 2012 sweetener contract in North America, which set prices for drinks giants such as PepsiCo and Coca-Cola, were now “substantially complete”. This was likely to ease corn sugar unit margins and recover commodity cost inflation, the firm revealed.
The firm said that industrial starch margins were ahead of the previous year, with lower volumes arising from a softening of demand from European paper and board customers. This was caused by the more “uncertain economic environment”.
Tate & Lyle’s bulk ingredients sector continued to benefit from “robust” levels of demand, domestically and in Mexico, the firm revealed.
The firm also said it had achieved “steady growth” in its speciality ingredients division, with volume growth rate lower than in the first half of the year.
“The group has performed well during the first nine months of the financial year, a statement from the firm revealed.
“While we recognise the wider uncertainties in the global economy, we remain on track to deliver a good performance for the full financial year.”