Associated British Foods said on July 1 that its sugar business expects an adjusted operating loss of £25 million to £60 million for the year ending September 2026 after third-quarter sugar sales fell 4%.
The company said the decline reflected lower average selling prices in Europe and lower volumes in Africa, where rain delayed production in Tanzania and higher imports affected South Africa following a delay in tariff adjustments.
ABF said expectations for the 2025/26 UK beet crop were unchanged, but profitability for the 2026/27 beet campaign was difficult to assess as contracting begins. It added that there was no upward movement in European sugar prices and that gas cost expectations for next year were significantly higher because of the Middle East conflict, affecting the European profit outlook and potentially leading to onerous contracts in fiscal 2026 if current conditions continue.
The lower end of the loss range assumes no Malawi currency devaluation and good output from the new Tanzania factory, while the upper end includes possible additional onerous contracts, a Malawi kwacha devaluation and a slower Tanzania ramp-up. ABF also said it currently expects a weaker sugar outcome in fiscal 2027 and still expects the European market to remain in surplus because of inventories carried over from 2025.