Beet processor British Sugar reported a rise in its half-year profits driven by higher sugar prices, lower beet costs and the weakness of the pound.
The sugar business also expects an improvement in its annual profits up to mid-September, while the group is seeing a sharp rise in beet planting this spring.
The beet harvest of 2016 produced a sugar output of 900,000t, below its record 2014 crop of 1.45m tonnes, but the group said the contracted beet area this spring has been increased and plantings by growers are well advanced.
The processor is part of the world’s biggest sugar company, Associated British Foods, which has sugar interests in Spain, China, South Africa and the UK, but it does not split out profits for its individual sugar units.
The group’s overall worldwide sugar business reported operating profits of £123m for its 24-week half-year period to 4 March to show a very sharp rise from £3m previously.
With the EU sugar beet quota system to be abolished in October, British Sugar expects this year’s crop area to be up 30% to well over 100,000ha, with beet prices rising 8.4% before possible bonuses.
It is expecting a rise in its 3,500 contracted growers who deliver beet to the group’s four processing plants at Wissington and Cantley in Norfolk, Bury St Edmunds in Suffolk and Newark in Nottinghamshire.
The sugar update came as parent group Associated British Foods reported a 35% rise in its half-year pre-tax profits to £624m, and added that its sugar business was the biggest single driver behind the group’s profit uplift.