Sugar sales hit sweet spot for Associated British Foods
AB Sugar, anchored in Peterborough, had a strong third quarter with revenues 21 per cent up on last year bringing the cumulative increase in this financial year to seven per cent.
This was driven by particularly strong volumes in Illovo and China, as well as by higher prices in Europe and Africa, reports parent company Associated British Foods.
The profit margin in Illovo was much improved on last year and more than offset lower European sugar margins, which were affected by higher production costs as a consequence of the reduction in the beet crop. All businesses continued to deliver savings from the on-going performance improvement programme.
The world sugar price has risen in recent months. In the European market, ABF expects demand to be in excess of production again this coming year, which should give further pricing opportunities if stronger global pricing is sustained.
UK sugar production of 0.9 million tonnes was well down on the 1.19 million tonnes produced last year, due to adverse weather conditions at the time of planting and the severe impact of virus yellows on sugar beet.
ABF’s production forecast for next year is just over one million tonnes with a reversion to normal yields more than offsetting a reduced planting area.
The work to reopen the Vivergo bioethanol facility in Hull is on target and supply to UK fuel blenders is expected to commence in early 2022.
Earlier this year the UK Department for Transport announced an increase in the mandated inclusion levels of renewable ethanol in petrol from E5 to E10 to be effective from September.