Shares in Tate & Lyle closed down 27% in London today after the sugar and sweetener maker warned that higher corn costs, a corn gluten export ban and a weaker dollar would hit profits.
The group is also forecasting a small half-year loss for its sugar business due to a difficult August in sugar trading.
Tate & Lyle said higher corn prices in Europe, the oversupply of the corn gluten market in the US after an export ban to the EU and currency translation would all act to depress its future outlook.
'Given the importance of these factors, the board views the near term outlook with caution,' the group said in a trading update towards the end of its half-year at the end of September.
It added that the bulk of its business - including its sucralose super sweetener and its US and European ingredient operations - were expected to show flat half-year profits when currency effects were stripped out.
The company warned that as contracts for corn purchases expired it faced significantly higher corn costs in Europe, which if sustained would have an increasingly severe effect on the profitability of its European ingredients division.
The US corn gluten export ban is due to a dispute over genetically modified corn.
