Corn prices in the US have increased “significantly” since mid-June as a result of the drought in the mid-west, while continued dry and hot conditions in central Europe have also driven up European corn prices, Tate & Lyle chairman Sir Peter Gershon told shareholders at the firm’s AGM in London earlier today.
Between June 15 and July 20, the September 2012 US corn futures price rose from $5.09 per bushel to $8.24 per bushel, he added: “It is not clear how the current volatility in the corn price and markets that drive co-product demand and pricing will impact the business over the remainder of the year.
“As in previous years, we will continue our strategy of maintaining full corn silos in the US to secure supply against the backdrop of tight market conditions."
Specialty food ingredients: Solid volume growth in US offset by weaker performance in Europe
Volumes and sales in Tate & Lyle’s Specialty Food Ingredients division in the quarter ended June 30 were up year on year, with solid overall volume growth in the US and emerging markets offset by a weaker performance from Europe, said Gershon.
Sucralose volumes were lower, primarily due to difficult market conditions in Europe.
This, together with the impact of the strike at the company's joint-venture plant in Turkey, meant sucralose operating profit was lower than expectations, he added.
However, operating profit in the Bulk Ingredients division was slightly above expectations with a strong performance from liquid sweeteners in the US and Europe “more than offsetting extremely challenging conditions in US ethanol”, he said.