Tate & Lyle Delivers 2007 Calendar Year Pricing Rounds
There was a small loss in sweetener volume as it sought to increase margins in a rising corn market at the end of the negotiating period. Total sweetener margins for the 2007 calendar year are expected to be higher, much as anticipated.
18/12/06 Tate & Lyle has issued a routine update regarding the 2007 calendar year pricing rounds.
Food & Industrial Ingredients, Americas has substantially completed the negotiation of its 2007 calendar year sales contracts, the company said. There was a small loss in sweetener volume as it sought to increase margins in a rising corn market at the end of the negotiating period. Total sweetener margins for the 2007 calendar year are expected to be higher, much as anticipated. Tat & Lyle also anticipates achieving higher total net margins on both value added food and industrial ingredients.
The company’s expectations for margins on ethanol sales, which represent a small proportion of Food & Industrial Ingredients, Americas’ overall sales, remain consistent with assumptions for its new facility in Fort Dodge, Iowa. Higher corn costs and lower gasoline prices mean that 2007 ethanol margins are expected to be substantially lower than those achieved in the current financial year.
Recent comments from the EU Agriculture Commissioner regarding the slow surrender of quota to the restructuring fund have heightened concerns over a continuation of oversupply of sugar in the sugar year ending 30 September 2008. Against this background, Tate & Lyle now thinks it unlikely that any recovery in sugar pricing will occur during the 2007 calendar year. This reinforces the company’s decision to surrender beet sugar quota at Eastern Sugar, where negotiations are ongoing.
The pricing round for Food & Industrial Ingredients, Europe is (as is normal for this time of year) at an early stage. So far satisfactory progress is being made to recover higher raw material and energy costs, the company reported.
