British Sugar upbeat as half-year profits rise

The parent group of beet processor British Sugar has credited higher sugar prices and the weak sterling rate for driving up its half-year profits.

In the Associated British Foods’ 2017 Interim Results report, the company said profits in the first half were “much improved” compared to the same period last year.

“With sales fully contracted for the year, we expect an improvement in British Sugar’s result for the full year,” they added.

The company said 2016 sugar production stood significantly lower than normal, at 900,000 tonnes, due to unfavourable planting conditions.

This comes in stark contrast to its record crop production, reported in 2014, of 1.45 million tonnes.

“The campaign started later in order to maximise the growth of the crop and was completed at all sites by late February,” said the company.

It said, as a consequence, high levels of sugar stocks held at the beginning of the year had reduced to meet sales demand.

“The contracted growing area for 2017/18 has been increased and planting by growers is well advanced,” they said.

With 2016/17 forecast to be the second year of global sugar deficit, world prices are currently higher than last year.

A tightening of EU stock levels has strengthened domestic prices across the region, whilst in Africa domestic and regional prices increased as a result of higher US dollar-denominated world prices.

Meanwhile, the lifting of European Union sugar quotas in October 2017 and leaving the EU offers “exciting opportunities” for the UK beet sugar industry, the company said.